The cost for remortgaging varies, as it depends on a number of factors. That’s why it’s important to look at the total cost of moving mortgages, not just the great rate.
Unless you’re staying with your existing lender, your new mortgage will have fees. In addition to this, you might have to pay a charge for repaying your mortgage early to switch deal (if you leave before the contract term of the mortgage product).
An arrangement fee is a cost the bank charges you to set up the paperwork for your new mortgage – it’s often a set fee. You can usually choose between paying the arrangement fee upfront or adding it to the mortgage. It's typically more cost-effective to pay the fee upfront, as you won't pay interest on it.
Although most are flat fees, some lenders charge the arrangement fee as a percentage of the loan - this can be a significant fee on a larger mortgage, so make sure to double-check before signing.
This is another setup cost for securing the mortgage; some lenders don't charge this, whereas others do. It is sometimes called an 'application’ or ‘reservation’ fee, and cannot be added to your mortgage like the arrangement fee. If you pay the booking fee and then decide not to go ahead with the mortgage, you won't get a refund.
When you remortgage a property, you’ll need to pay a solicitor to sort out the transfer of the money from one lender to another. It’s not a big job - many solicitors charge a fixed fee. If you're struggling to find the right solicitor, get in touch - we'd be happy to recommend someone to you.
A mortgage valuation fee is a charge for checking that the bank can see how much your property is worth against the amount of money you would like to borrow. The bank appoints a valuer, and you have to pay for it. It costs between £250 to £1500.
There are many reasons for setting a mortgage early - you receive an inheritance, you need to sell the house to rent for work reasons/divorce or simply need to switch mortgage deals to get a better deal. Early repayment charges are set by the lender who provides you funding, so they change – some lenders have much lower ERCs. It is common to see a percentage that is matched to the year, for example: