Choosing a mortgage deal involves more than just comparing interest rates, as fees can significantly impact the overall cost. For example, a £999 product fee, sometimes called an arrangement fee, can affect the total cost of a mortgage, especially for smaller loans. Experts advise that borrowers should not assume the mortgage with the lowest rate will be the cheapest overall. For a two-year fixed-rate mortgage, a rate of 4.8% with a £999 fee may cost more than a 5% rate without a fee, depending on the loan amount. For a £150,000 mortgage over 25 years, the 4.8% rate with the fee would result in paying approximately £582 more over the first two years compared to a 5% rate with no fee. The monthly repayment is lower with the lower rate, but the savings do not cover the upfront charge. The impact of the fee varies with the loan size. For a £75,000 mortgage, the difference is about £790, while for a £250,000 mortgage, the extra cost is about £303. However, with a larger loan, the lower rate also means repaying more of the loan itself, which can reduce the overall cost. Experts suggest that the bigger the mortgage, the more a rate reduction can save in pounds. A fee may be worthwhile if the interest rate is low enough to save the fee back and some on top. Adding the fee to the mortgage can avoid upfront costs but means paying interest on it. For a £150,000 repayment mortgage over 25 years at 5%, adding a £999 fee increases the monthly payment by £5.84. Over the life of the loan, this could add about £753 in interest, on top of repaying the £999 itself. Before choosing a mortgage, it is important to consider both versions of the calculation: paying the fee upfront and adding it to the loan. A small difference in the monthly payment can hide a much larger bill over time.