Buying a home or remortgaging isn’t just about the deposit and the monthly repayments. There are a range of fees and charges that can catch homeowners off guard. Knowing what to expect means no nasty surprises and helps you budget more accurately.
Common Mortgage Fees Explained
- Arrangement Fee (or Product Fee)
- Charged by lenders for setting up your mortgage deal.
- Can be anything from £0 to over £2,000.
- Sometimes you can add it to the mortgage balance, but then you’ll pay interest on it.
- Booking Fee
- A smaller fee (often £99–£250) paid upfront to secure a specific deal.
- Usually non-refundable if you don’t proceed.
- Valuation Fee
- Covers the lender’s valuation of the property to confirm it’s worth what you’re paying.
- Some lenders include it for free, others charge £150–£1,500 depending on the property price.
- Legal/Conveyancing Fees
- Paid to a solicitor or licensed conveyancer to handle the legal side of the purchase.
- Includes searches, contracts, and Land Registry updates.
- Budget around £800–£1,500, though this varies with property value.
- Survey Costs
- A more detailed inspection than the lender’s valuation, chosen by you for peace of mind.
- Ranges from £400 for a homebuyer’s report to £1,500+ for a full building survey.
- Early Repayment Charges (ERCs)
- If you repay your mortgage or remortgage before the end of your fixed/tracker period, you may face a penalty (often 1–5% of the balance).
- Exit Fee (or Deeds Release Fee)
- Charged when you fully repay your mortgage, typically £75–£300.
Stamp Duty (If Buying a Home)
In England and Northern Ireland, stamp duty land tax (SDLT) applies above certain thresholds. Rates vary depending on property value, whether you’re a first-time buyer, and if you already own another property. Scotland (LBTT) and Wales (LTT) have their own systems.
Top Tips to Manage Costs
- Ask upfront – Your mortgage adviser can give you a full Key Facts Illustration (KFI) or European Standardised Information Sheet (ESIS) showing all fees.
- Factor in hidden extras – Surveys, insurance, and moving costs add up quickly.
- Weigh up fees vs. rate – Sometimes a low-rate deal with high fees costs more overall than a higher-rate, no-fee product.
- Check for incentives – Some lenders offer cashback, free valuations, or free legal work.
Key takeaway: Mortgage fees can add thousands to your costs, but understanding them upfront allows you to budget, compare deals fairly, and avoid unwelcome surprises.
