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Remortgage fees and costs

Last updated on 6th September 2023 by Martin Alexander

A remortgage can have many benefits, such as reducing your mortgage rate or withdrawing equity. But how much does it cost to remortgage, and what are the fees involved?

The cost of a remortgage largely depends on your reasons for remortgaging. Maybe you want to renovate your home or treat yourself to a holiday. Well, a remortgage could be the answer only if the fees and costs make financial sense.

If you’ve decided to remortgage, you’ve perhaps tried calculating the costs of doing so and whether or not it’s viable. Calculating the cost of a remortgage can be a demanding task, so we’ve decided to write this article to help you through it.

We’ll cover everything from remortgage fees to surveyor fees to legal fees and how to get the best rate. You can also contact our advisors at any time with your mortgage questions.

What fees will I be charged to remortgage?

The fees you can be charged for a remortgage include:

  • Lender arrangement fees
  • Booking fees
  • Survey/valuation fees
  • Early repayment charges
  • Solicitor fees
  • Mortgage broker fees

Fees payable to your broker will usually depend on the broker, the mortgage they’ve sourced, and your own circumstances. Solicitor fees will vary, but some remortgage deals include free legal work as part of the mortgage. We’ll discuss this in more depth in the article.

Each lender will always have numerous mortgage deals on offer. Furthermore, each mortgage deal will have different costs attached. Let’s take a look at each cost in more detail.

How much does it cost to remortgage?

To get a new mortgage, there are costs to be aware of:

Fee Description Average Cost
Product fees Your property will need to be valued by lenders. This is so they can decide whether the mortgage you’ve applied for is suitable and calculate equity. Lenders charge product fees on deals that usually have the best rates. This is so lenders can recover some of the cost they’ll lose on the interest rate in the form of a fee.
Booking fee This is charged at the time of application, similar to a reservation fee. For instance, if you select a deal, you may be required to pay a booking fee to reserve the deal. Booking fees are typically non-refundable if you change your mind at a later date. Between £100-£200
Valuation fee Your property will need to be valued by lenders. This is so they can decide whether the mortgage you’ve applied for is suitable and calculate equity. Around £200-£300, although some lenders include this for free as part of their package.
Legal fees Legal fees are charged as the title deeds of the property need to be updated. Conveyancers are legally able to do this and ensure the mortgage meets legal requirements. £300 on average, but some lenders will offer this for free as part of the deal.
Early repayment charge (ERC) If your mortgage is yet to expire, you may be liable to pay an ERC to your current lender. If you’re unsure, check the terms and conditions of your existing deal or speak to your lender. Between 1-5% of your existing loan. Some lenders may have a flat fee which can exceed £5000
Exit fee Your existing lender may charge you an exit fee to switch your mortgage to a different lender. Around £50-£100

What is a lender arrangement fee?

An arrangement fee is payable to your lender for arranging a mortgage. Some lenders will have little or no arrangement fees, whereas some lenders will charge arrangement fees over £1000. Arrangement fees will either be a fixed amount or based on a percentage of your mortgage.

Why would you pay an arrangement fee of £1000 if you can remortgage with a different lender that doesn’t have arrangement fees? The reason is simple. The best remortgage deals typically have arrangement fees attached to them. You can add the fee to your mortgage, but you will pay interest on this in addition to your mortgage. As a result, it often makes financial sense to clear this fee upfront.

Lenders can also charge booking fees, but they’re usually quite small compared to other fees. Booking fees don’t tend to exceed £150 and can be as little as £20. In other words, a booking fee is a type of administration charge.

Mortgage lenders are ultimately running a business, so they will charge borrowers for the privilege of a low interest rate. To minimise your remortgage fees, you’ll have to calculate the overall cost of entering into a remortgage.

It’s impossible to say whether or not deals with or without arrangement fees will save you money without assessing each mortgage and calculating your overall cost. If you’re struggling to do this, our advisors can help. You can also use our remortgage calculator here.

Do I need a survey to remortgage?

Your lender may carry out a survey of the property you wish to remortgage. Whether or not a formal survey is carried out, lenders must ensure that your property offers adequate security. Lenders also need to be sure that the remortgage amount meets the actual market value of the property.

Some lenders may offer free valuations as part of the deal, whereas others will charge a survey fee. It’s important to note that you won’t be able to select your own surveyor for remortgage purposes.

Remortgage valuation fees are typically no more than £500. That being said, survey costs will depend on the size of the loan, in addition to the remortgage deal you’ve selected.

What is an early repayment charge?

Early repayment charges (ERC) may be charged if you remortgage earlier than your lender has agreed. For instance, each mortgage typically has introductory periods of 2, 3 or 5 years.

Once the initial period has passed, a remortgage should be free of early redemption charges. Nonetheless, if you remortgage earlier than agreed, you may leave yourself open to early repayment fees.

It’s crucial to check whether or not your current deal has an early repayment charge. You can then calculate the amount and assess whether taking an early remortgage is viable. You may find that it makes financial sense to wait until you can remortgage without paying early repayment charges.

The cost of an ERC will vary. Each mortgage will have unique terms, including the fees for redeeming your mortgage early. You can usually find the exact figure in your Key Facts Illustration (KFI). Some lenders base the fee on a percentage of the loan amount, whereas others have a fixed fee.

If you hope to remortgage but are unsure whether you’ll be charged an early repayment fee, you can ask an advisor for help.

Read more: Can I remortgage early?

You may remember that when you first purchased your home, you instructed solicitors to carry out the conveyancing. Although you’re not purchasing the property again, solicitors will still need to carry out the legal work in relation to your remortgage.

The legal work required for a remortgage is largely on behalf of the lenders involved with the transaction. This is because the initial charge from your first lender needs to be removed from the property title and replaced with a charge from your new lender.

The amount of legal work involved is a lot less when compared to purchasing a property from scratch. This is reflected in the fees charged by solicitors for a remortgage. As a result, legal fees are typically lower when compared to new purchases. Some lenders will offer you free legal work as part of the remortgage deal, whereas other lenders will charge.

You can also instruct your solicitor to do legal work on your behalf. Legal fees charged by a lender often tend to be lower than if you were to use your own solicitor. That being said, you may also notice a difference in the level of service you receive.

Some lenders also offer cashback incentives if you decide to use your own solicitor. This can be quite useful as the cashback can cover some of the remortgage fees. Legal fees will vary and start from £0 but can go up to £400, possibly more, depending on the value and tenure of the property.

Some solicitors may also charge more if you withdraw equity from the remortgage or change your mortgage from residential to buy to let.

Mortgage broker fees for a remortgage

If you use a mortgage broker to find the best remortgage deal possible, then brokers will charge you a fee for their time and expertise. Selecting the right deal can save you hundreds, if not thousands of pounds over your mortgage term.

Brokers can also do all of the number crunching for you. Doing so can ensure that you’re getting the best remortgage possible. You can make an enquiry with an advisor for more information. We also have specialist advisors available if you have bad credit or your income isn’t well documented.

About the author

Martin Alexander
Senior Mortgage Advisor

Martin is a senior mortgage advisor who has held a CeMAP qualification for over 15 years while completing an MBA in Global Banking and Finance.