Remortgage Fees: How Much Does it Cost to Remortgage?

What Types of Remortgage Fees Will I Pay?

Remortgage fees are split between two kinds of costs. Specifically, those for leaving your current mortgage and those for setting up a new deal. The exact fees you’ll pay will depend on the lender and the type of remortgage you choose.

How Much Will It Cost Me to Remortgage?

The price of remortgaging depends on both your existing mortgage and the new arrangement you move to. In some cases, the outlay is relatively small, amounting to only a few hundred pounds. In others, the combined fees can add up to several thousand.

The Fees You’ll Pay When You Leave a Mortgage Deal

Early repayment charge/redemption fee

Leaving your mortgage deal ahead of schedule entails what’s known as an early repayment charge. This fee is calculated as a percentage relative to your outstanding mortgage and will fall between 1% and 5%.If you switch just before your lender puts you onto their standard variable rate, then you’ll avoid the charge. You therefore need to review your mortgage terms closely before making the switch since this fee could wipe out any savings you’d make from a lower interest rate.

Deeds release fee/exit fee

Also referred to as a mortgage exit fee or discharge fee, this is an administrative charge your current lender may apply for handling and forwarding your title deeds to your solicitor. The cost will be from £50 to £300.This fee will either be paid upfront when you first take out your mortgage or settled at the end, i.e., when the mortgage is fully repaid. You’ll be able to know the exact amount by referring to your original mortgage agreement. If no such fee was specified, your lender shouldn’t ask you to pay it, so it’s worth double-checking your original documentation to see what was agreed.

Fees You’ll Encounter for Getting a New Mortgage Deal

Arrangement fee/product fee

Among the various charges tied to a new mortgage, the arrangement fee is often the most substantial. The amount varies by lender, it may be a flat fee or calculated as a percentage of the loan – expect to pay around £1,000-£1,500. Some mortgage products won’t come with this charge, but not always.You’ll usually have the option to pay the fee upfront or add it to the mortgage balance. Paying it upfront avoids additional interest, but bear in mind that if the mortgage doesn’t complete, the fee is typically non-refundable. If you were to choose to roll the cost of this fee into your loan, you’ll end up paying more over time owing to the interest.A workaround is to add the fee to the mortgage initially before making an overpayment by the same amount once the loan is in place. Yet, this will only work if your lender allows you to overpay without a fee.

Valuation fee

Your lender will need to assess the value of your property before approving a mortgage on it, and this implies a valuation fee. The valuation basically tells the lender whether the property provides sufficient security for the loan. This is useful to them in case they ever need to recover the funds through a sale.The valuation will be arranged by the lender, but the cost is paid by you upfront. The cost of this fee depends on the property’s size and value, starting from £300 and going anywhere up to £1,500.Unlike when purchasing a new home, this valuation is often sufficient on its own, with no need for additional surveys such as a structural report. Some lenders may even waive the fee altogether as part of a remortgage deal.

Booking fee/reservation/application fee

A booking fee is a charge lenders apply to secure a specific mortgage deal, such as a fixed-rate, tracker, or discounted offer. It essentially holds the deal in place while your application is going through processing.This fee ranges from £100 to £300 and is paid when you submit your application. It should be noted that this is typically non-refundable, even if the mortgage doesn’t go ahead.

Conveyancing fee

When remortgaging, legal work is needed to remove your previous lender’s claim on the property and register your new lender’s interest. This process, known as conveyancing, is usually simpler (and less expensive) than when you bought your home.In many instances, the new lender will cover the legal costs by including their own solicitor as part of the remortgage offer. Although, this means you won’t be able to choose your own representative. If you prefer to use your own solicitor or if legal fees aren’t included in the deal, you’ll need to pay for this yourself, typically between £300 and £350, payable upfront.

Other Remortgaging Costs to Consider

Apart from the main ones we’ve mentioned alongside the cost of your new repayments, if you’ll be working with a mortgage broker then they’ll charge a fee for their services as well. The cost can vary a lot here because some brokers want a flat fee, while others take a percentage of the mortgage amount. Albeit, many brokers instead receive commission from the lender, which means you won’t have to pay anything.If you go directly to a lender you’ll avoid such fees, but it does mean taking on the research and admin yourself. Likewise, there’s a high chance they’ll get you a better deal than if you were on your own, saving you more in the long term in comparison to what their fee would cost.

Is the Cost of Remortgaging Worth It?

Switching deals purely to secure a lower rate isn’t as achievable as it used to be, with lots of people now moving onto higher rates once their current deal ends. Even so, it’s still highly recommended in certain situations, like if your property has increased in value. And, if your fixed or discounted term is finishing, then covering the remortgage fees will inevitably be cheaper than being left on your lender’s standard variable rate. Not to mention, you can reduce costs by going for a product transfer within your existing lender’s range, thereby avoiding some of the fees.

Get Professional Guidance to Compare Remortgage Costs

Remortgaging is a significant financial decision, and it’s crucial to weigh up your options carefully to ensure you’re getting genuine value, not just a tempting interest rate with hidden fees attached. Some lenders offset seemingly low rates with high upfront charges, which can make a deal more expensive in the long run. This is where expert advice makes all the difference.Our user-friendly online tool lets you compare the latest remortgage offers from lenders across the UK, giving you access to real-time information on competitive rates. And when you spot a deal that suits your needs, our experienced advisers are here to guide you through the next steps, with support tailored to your individual goals.We’ll take the time to understand your financial situation and long-term plans, so we can help you choose a remortgage option which truly fits. Whether you’re ready to get started or just need some guidance, be sure to get in touch. We’re here to make the whole process clear, straightforward, and stress-free.