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There are a number of remortgaging costs you may need to pay when you take out a new deal. These can run into thousands of pounds so it’s essential you know where you stand before you start. Here’s what you need to know and how to keep costs down…
The amount it will cost you to remortgage depends on your current mortgage deal and the mortgage you’re moving to. For some borrowers, remortgaging costs will be a few hundred pounds or less. But for others, remortgaging costs can run into thousands of pounds.
Remortgaging costs are broken down into:
Read on for more details but here’s an overview of remortgaging costs you may need to pay.
| Fee | What is it? | How much does it cost? |
| Early repayment charge (ERC) | An early repayment charge (ERC) is a fee you may have to pay if you remortgage before the agreed end of your deal or want to pay off the balance. | Typically 1%-5% of the outstanding balance on your mortgage |
| Exit fee | Exit fees are admin charges a lender may charge when you pay off your mortgage in full or remortgage. | Up to £300. But some lenders won’t charge. |
| Fee | What is it? | Average cost |
| Arrangement fee | This covers the cost of setting up your new mortgage. Lenders often charge a high arrangement fee on their best mortgage rates. | £0 – £2,000+ |
| Booking fee | Some lenders charge a fee when you apply for a mortgage. | £500 |
| Mortgage valuation fee | This fee covers the cost of a mortgage valuation survey being carried out. But not all deals charge this. | £400 |
| Conveyancing fee | When you remortgage, your new lender needs to be added to the property’s title deeds. You’ll need a conveyancing solicitor to handle this for you. Although many lenders will offer it for free. | £300 |
| Mortgage broker fee | Some mortgage brokers charge no fee, while others charge up to 1% of your mortgage. We recommend you avoid this unnecessary cost. | Either £0 or up to 1% of the value of the mortgage |
Get fee-free remortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
Let’s look at these remortgaging costs in the UK more detail:
An early repayment charge (ERC) is a fee you may have to pay if you pay off your mortgage before the agreed end of your deal by remortgaging or paying off the balance. An ERC is usually calculated as a percentage of your outstanding mortgage balance. This is typically between 1% and 5% although the percentage you pay often reduces over time. It could amount to thousands of pounds making it potentially the most expensive remortgaging fee you may need to pay.
For example, on a 5 year fixed deal, the early repayment charge could be 5% in year one, 4% in year two, and so on. So on a £200,000 outstanding mortgage balance:
There are things you can do to avoid needing to pay an early repayment charge including:
For more information, read our guide on Early repayment charges and how to avoid them.
Exit fees, sometimes 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. The exact amount will be set out in your mortgage offer.
Remortgaging costs you may need to pay when getting your new deal in the UK include:
The biggest remortgage cost may be a mortgage arrangement fee. It can also be called the product fee or completion fee.
When you’re comparing mortgages, you should take into account any mortgage fees as well as the rate. Some of the best mortgage rates often come with high mortgage arrangement fees. These might be £500 to £1000 but could be £2000 or more.
Whether or not paying a higher arrangement fee in order to get a lower rate is right for you will depend on your circumstances. The easiest way to work it out is to get a fee-free mortgage broker to do the calculations for you and find the right mortgage for you.
You’ll usually have the option to pay the mortgage product fee upfront or to add it to your mortgage. But if you add it to your mortgage, you’ll increase the amount you owe. Be sure to check whether the fee is refundable if the mortgage doesn’t go ahead. If it isn’t, it may be possible to request that the fee is added to your mortgage and then to pay it once your application has been approved and is definitely proceeding. Your mortgage broker will be able to run through this with you.
When you remortgage, if you switch to a new lender, they will require that a mortgage valuation survey is carried out. The mortgage valuation survey cost usually varies depending on the size of the property, however some lenders charge a flat fee. For example with Santander mortgage valuations, the mortgage valuation fee is £180 on all properties up to £2.5 million.
Some lenders throw in free valuations as part of a remortgage deal. But don’t let that alone sway you. For remortgage advice, speak to a fee-free mortgage broker that can advise you on the best deal for you.
Get fee-free remortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
You won’t need to pay legal fees when you remortgage if you’re borrowing more on your existing mortgage deal with your existing lender or if you remortgage with your current lender, by simply moving to a new rate or deal.
But otherwise, you will need a solicitor or conveyancer, to help with the legal side of things when you remortgage. This can cost several hundreds of pounds if you need to pay it and you’ll need to pay this upfront. However, your lender may offer a free legal package. Read our guide Remortgaging: Do I need a conveyancing solicitor?
A mortgage broker’s expert advice can be invaluable in ensuring you make the right decision about your mortgage. However, while some mortgage brokers charge no fee, others charge between a few hundred pounds up to 1% of your mortgage. We recommend you avoid this additional cost.
Some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. However, you can get fee-free advice from the expert advisers at Mortgage Advice Bureau by using this site, this form or phone number.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
When you move onto a new deal, if your new rate is different, then your mortgage payments will be too. So factor this into your remortgaging costs.
Yes. You can use our free mortgage cost and repayments calculator to see how much your payments will be when you remortgage.
The fees you’ll pay to remortgage with the same lender may be lower. For example, you’ll typically avoid valuation and legal fees. But by sticking with the same lender, your choice of mortgage deals may be much smaller. So you may end up paying more overall.
So to find out which is the best mortgage for you, you’ll need to compare the overall cost of remortgaging with your current lender with the cost of switching to a deal with a new lender.
But you don’t need to do this yourself. The expert advisers at Mortgage Advice Bureau can do the calculations for you to help you decide which is the best mortgage for you.
It can take up to 3 months to remortgage but it could be much quicker and if you switch to a new deal with your current lender, it can take around a week.
However, it’s advisable to start the process six months before your current deal expires. This lets you lock in a rate and then keep it under review to make sure you don’t miss out on a better mortgage deal before you need to switch. Find out more in our guide How long does it take to remortgage?
If your current mortgage deal ends in the next six months you should start the remortgage process now. It’s a good idea to chat through your options with a fee-free mortgage broker. If you’re on your lender’s standard variable rate, it’s advisable to urgently review your remortgage options because SVR rates can be very expensive.
Get fee-free remortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Whether or not a remortgage will be cheaper than when you took out your current mortgage will depend on the rate you’re paying now, compared with the rate you can get when you remortgage. You’ll also need to factor in any remortgage costs too.
To get a clear idea of how much it will cost you to remortgage, based on your personal circumstances, it’s a good idea to get fee-free advice from a mortgage broker.
Some people may prefer to remortgage every 2 years, in the hope that if mortgage rates improve they may be able to switch to a better mortgage deal sooner. However, if rates increase, it may mean paying a higher rate sooner compared to taking out a longer deal and you’ll need to pay any remortgaging costs more frequently.
Ultimately, what’s right for you will depend on your personal circumstances so it’s advisable to get fee-free mortgage advice from an expert adviser.
Remortgaging costs are the extra fees and charges you may have to pay when you remortgage, including any fees you may have to pay to leave your current mortgage deal and any costs when setting up your new mortgage.
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