Understanding Remortgage Costs and Fees

Remortgaging can save you money, but it's essential to understand the costs and fees involved. Typically, remortgaging comes with a fee of around £500 to £1,500.

The main cost you'll face is the arrangement fee, which can range from £200 to £2,000. This fee is usually non-refundable and can be added to your mortgage balance.

You'll also need to consider the valuation fee, which can range from £150 to £1,500. This fee covers the cost of a property valuation, which is usually required by your lender.

Remortgaging can cost a few hundred pounds or several thousand pounds, depending on your situation and the new deal you're taking out.

You may find it costs less, or perhaps have nothing to pay upfront at all if your new mortgage has no fees.

Mortgage rates tend to be higher than on mortgages where fees are payable.

Weighing up the overall cost of remortgaging, taking into account both the mortgage rate and the fees, is crucial when working out if remortgaging is worthwhile.

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Some lenders let you increase your loan to cover early repayment charges (ERCs), but this will raise the LTV (loan-to-value) of your borrowing.

Paying interest on ERCs added to your mortgage balance is not always the most cost-effective option in the long term.

You may be able to avoid paying ERCs if you wait for your current deal to end, but personal circumstances may not always allow for this.

The cost of remortgaging with the same lender may be lower, as you may be able to avoid needing to pay an early repayment charge and avoid legal fees too.

However, sticking with the same lender may end up costing more overall, so it's essential to compare the costs.

A fee-free mortgage broker can help you compare deals and decide when is the best time to remortgage for your circumstances.

Some mortgage brokers charge a fee for their services, which can be fairly expensive, often between £300-£600 or up to 2% of the total mortgage value.

You should be cautious of brokers demanding up-front fees, as you could lose them if they're unable to find you a suitable deal.

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Some mortgage brokers may get a commission from the mortgage provider rather than charging a fee.

The broker's fee may be a flat fee costing between £300 and £600 or may cost up to 1% of the value of the mortgage.

Keep in mind that the products brokers have access to could save you more than their fee over the term of the mortgage if they're able to find you preferential rates.

Some remortgage fees you may have to pay include early repayment charges, valuation fees, and application fees, with average costs varying depending on the circumstances.

Leaving your current lender can come with some costs. You may have to pay an early repayment charge (ERC), which is typically between 1% and 5% of your outstanding mortgage balance.

ERCs can be the most costly element of remortgaging, so it's essential to check if you'll have to pay one before switching to a new deal. You can usually avoid ERCs by waiting until your current deal ends, but some longer deals may not charge ERCs for the whole duration.

If you do need to pay an ERC, it's worth timing it right. You can start the remortgage process six months before your current deal ends and switch to a new deal without incurring the charge.

Here are some common ERC examples:

You may also be charged a deeds release fee, which can cost up to £300, although some lenders won't charge this fee.

You'll need to pay solicitor's fees for the role they play in completing a remortgage, which can cost around £300.

These fees cover the legal paperwork and ensuring the deeds of your property switch to your new mortgage, as well as making sure your current lender receives the funds to pay off the mortgage you're leaving.

In some cases, lenders may offer free legal fees as an incentive for switching your mortgage to them, but you'll likely need to use a solicitor chosen by the lender.

If you remortgage with your current lender on similar terms, you may not need to pay legal fees at all.

Some solicitors charge between £50 and £300 for deeds release/admin fees, which cover the cost of transferring the title deeds of your property to the new mortgage provider.

You may need to pay a conveyancing fee, which can cost around £300, when you remortgage and your new lender needs to be added to the property's title deeds.

Lenders may offer a free conveyancing fee as part of the remortgage deal, but it's always good to ask your adviser to confirm.

Here's a list of potential fees you may need to pay when remortgaging:

Leaving your current deal can come with some costs, but understanding what they are can help you make an informed decision. An early repayment charge (ERC) is a fee you may have to pay if you remortgage before the agreed end of your deal, typically 1%-5% of the outstanding balance on your mortgage.

ERCs can be a significant expense, with some examples showing that on a £200,000 outstanding mortgage balance, the charge could be £10,000 in year one, £8,000 in year two, and £6,000 in year three.

You can avoid paying an ERC by waiting until your current deal ends, but this may not always be possible. Some lenders allow you to remortgage with the same lender, known as a product transfer, but this limits your mortgage choice.

To avoid an ERC, you can also time it right by starting the remortgage process six months before your current deal ends, so you can switch deals as soon as you can do so without incurring the charge.

Here are some examples of ERCs:

Exit fees, also known as mortgage release or discharge fees, are admin charges a lender may charge when you pay off your mortgage in full or remortgage. Not all lenders charge these, but if they do, it may be up to £300.

In some cases, exit fees can be as low as £50-£65, and sometimes the exit fee and deeds release fee are the same thing, in which case the charge could be higher. However, some lenders don’t charge exit fees at all.

Here are some examples of exit fees:

You'll typically need to pay an arrangement fee, also known as a product fee or completion fee, when setting up your new remortgage deal. This fee can be costly, with the highest potentially coming in at over £2,000.

The arrangement fee can be paid upfront or added to your mortgage, but adding it to your mortgage will increase the amount you owe and you'll pay interest on the fee over your whole mortgage term. It's usually non-refundable if you don't go through with the remortgage.

Some lenders charge a fixed arrangement fee, ranging from around £500 to around £1,500, while others charge a percentage of the amount you're borrowing. The lower the mortgage rate, the higher the arrangement fee will usually be, and vice versa.

Here are some average costs you might expect to pay:

A new deal can bring a fresh set of costs. You may need to pay arrangement fees, which can range from £0 to £2,000+.

The booking fee is another cost to consider, typically £500. This fee is charged by some lenders when you apply for a mortgage.

A mortgage valuation fee is also a possibility, usually £400. This fee covers the cost of a mortgage valuation survey being carried out.

You'll also need to factor in the conveyancing fee, typically £300. This fee covers the cost of your new lender being added to the property's title deeds.

Some mortgage brokers charge fees, which can be either £0 or up to 1% of the value of the mortgage.

Your new monthly payments will also be affected by your new deal, so factor in the change in rate. This may mean your mortgage payments will be different.

Arrangement/Product fees can be a significant cost when taking out a new mortgage deal. The average cost of an arrangement fee is around £1,000-£2,000, although it can be higher.

This fee is usually charged by the lender to cover their administration costs. You may be able to add this cost onto your loan, but you'll pay interest on the fee amount for the duration of your mortgage, making it more expensive in the long term.

Some lenders offer fee-free remortgage interest rates, but these are typically higher to compensate for the lack of fees. This means that it may not be the cheapest option in the long term if you only consider deals with no fees.

You can usually pay the arrangement fee in one of two ways: upfront or by adding it to your mortgage. Be aware that adding the fee to your mortgage will increase the amount you owe and you'll pay interest on it over the life of your mortgage.

The arrangement fee can also be a percentage of the amount you're borrowing, and the lower the mortgage rate, the higher the arrangement fee will usually be.

Remortgaging can cost a few hundred pounds or several thousand pounds, depending on your situation and the new deal you're taking out.

You may find it costs less, or perhaps have nothing to pay upfront at all if your new mortgage has no fees.

However, mortgage rates tend to be higher than on mortgages where fees are payable, so it's crucial to weigh up the overall cost of remortgaging.

The cost of remortgaging with the same lender may be lower, as you may be able to avoid needing to pay an early repayment charge and avoid legal fees too.

But by sticking with the same lender, you may end up paying more overall, so it's essential to compare the costs.

A mortgage broker can help you compare the benefits of remortgaging with one lender or the next, or now vs later, and determine whether it's worth remortgaging early or waiting out your deal.

Comparing remortgage costs can be difficult, especially in the current mortgage market where rates are volatile, making it tough to know whether it's possible to save at all by remortgaging.

Comparing remortgage deals can be a daunting task, especially with the current volatile market. Comparing remortgage costs is difficult due to the volatility of rates.

A mortgage broker can make it easier to compare deals from different lenders. Time is a crucial factor when maximizing benefits, so considering when to remortgage is just as important as looking at fees.

Comparing deals with the help of an expert broker can help you get the best deal for your circumstances. This is particularly helpful when trying to save money or borrow more.

In some cases, remortgaging with the same lender may be cheaper than taking out a new mortgage. This is because you won't need to pay for a mortgage valuation fee or legal fees.

However, the overall cost of remortgaging may be higher if you choose a product with a bigger arrangement fee or a higher mortgage rate.

You might be able to save money by remortgaging, especially if your property value has risen dramatically.

Consider reading: Mortgage Rates Broker

Using a mortgage broker can be a great way to compare deals and find the best one for your circumstances. A broker can help you compare the costs of remortgaging and determine whether it's worth switching now or waiting.

You don't have to use a mortgage broker, but it can often be very beneficial to do so. They can compare deals for you, including comparing the costs of remortgaging, and help you decide when is the best time to do so for your circumstances.

Many brokers charge a fee for their services, and this can be fairly expensive. Some charge a flat rate of between £300-£600, while others charge a percentage of your new mortgage deal, often up to 2% of the total mortgage value.

It's a good idea to be cautious of brokers demanding up-front fees, as it's possible you could lose them if they're unable to find you a suitable deal. Some mortgage brokers, like Mojo Mortgages, are totally fee-free.

A mortgage broker's expert advice can be invaluable in ensuring you make the right decision about your mortgage. Their fee may be a flat fee costing between £300 and £600 or may cost up to 1% of the value of the mortgage.

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The biggest pitfall of remortgaging is if you need to pay an early repayment charge to leave your current deal, which can cost thousands of pounds.

You may still be able to save money in the long run, but it's essential to speak to a fee-free mortgage broker who can do the calculations for you and explain your mortgage options.

These early repayment charges can be a significant risk, and it's crucial to understand the costs involved before making a decision.

A fee-free mortgage broker can help you weigh the pros and cons and make an informed decision about whether remortgaging is right for you.

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The remortgaging process can be straightforward if you're prepared. You'll typically need to provide financial information, including proof of income and employment, to your lender.

This information will help them assess your eligibility for a new mortgage deal. You'll also need to provide details about your current mortgage, such as the outstanding balance and any outstanding fees.

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Once you've submitted your application, the lender will review it and may request additional information. This can take anywhere from a few days to several weeks, depending on the complexity of your application.

After your application has been approved, you'll receive a formal offer outlining the terms of your new mortgage.

Valuation is a crucial step in the remortgaging process. Your lender will want to confirm the value of your property before deciding if they can offer you a mortgage.

Valuation fees can vary depending on the size and value of your property, but typically cost between £200 and £500. However, for larger or less conventional properties, the cost can be as high as £1,500.

Some lenders offer free valuation fees as an incentive to choose them, so it's worth shopping around. If you remortgage with your current lender, you may not need to pay a new valuation fee.

Booking fees are often confusing, but are not often charged nowadays. If you do have to pay a booking fee, it's usually included in the overall cost of the mortgage application.

The cost of the valuation will depend on the size of your home, with larger properties costing more. For example, a mortgage valuation fee with Santander can cost £180 on properties up to £2.5 million.

Some lenders may charge a flat fee for the valuation, while others may charge a fee based on the property value.

Booking fees are charged by some lenders to effectively reserve a remortgage deal while your application is being assessed. They tend to cost between £100 to £300 and aren't refundable, even if your application is unsuccessful.

Some lenders will also charge a booking fee which you must pay to secure the remortgage deal you want. This fee typically ranges from £100 to £200 and is non-refundable.

A booking fee is a one-time fee of around £100–£200 that some lenders charge when you sign up with them. It has to be paid when you submit the application and is non-refundable.

Consider reading: Chattel Mortgage Lenders

If you're unsure about remortgaging, it's natural to feel overwhelmed. You can use our free mortgage cost and repayments calculator to see how much your payments will be when you remortgage.

Calculating remortgage costs can be a challenge. Our calculator is a valuable tool to help you make informed decisions.

The calculator is free, so you can use it without any additional costs. You can also rely on it to provide accurate results.