The reason most people remortgage is to save money, therefore, how much can you expect to spend on remortgaging and is it worth it? Is it even possible to remortgage at no cost at all? It is possible to remortgage for free! You will be able to re-mortgage to a better interest rate and save money on your monthly mortgage payments for no cost at all.
In this guide, we will look at the different fees that you can expect to pay when you come to remortgage. We will show you a way that you can remortgage for free!
Remortgage for free and to a better rate
The first option open to you when remortgaging will be to stay with your existing lender. The problem with this is that although they may make it look simple to stay with them and they may also do it for little cost. Your existing bank or building society are relying on you being lazy and therefore the mortgage deal they offer you will reflect this. Quite often you will find the lender’s rate is very underwhelming. Over the term of the mortgage staying with your existing lender could cost you a small fortune!
Table of Contents
Remortgage Arrangement Fees
An arrangement fee is really for arranging the mortgage with a fee to get an even lower interest rate (Should you pay an arrangement fee?). Every bank and building society will differ on what they will call this however avoid paying this fee if possible as it will cost on average £999. Although lenders will offer to add this to the mortgage, you will end up paying for it one day!
When you remortgage the new mortgage lender will want to make sure your property is suitable to lend money against. They will therefore want to carry out a valuation survey on the property. Lots of lenders will carry out a desktop valuation survey. Others will want to carry out a visual survey and will want a surveyor to inspect your property. Some lenders will want to charge you for the survey however there is a way of avoiding this cost which we will show you.
Remortgage Legal Fees
Whenever you remortgage you will need a conveyancer who will carry out the legal and financial transfer of your mortgage from one lender to another. When you bought your property you will have paid conveyancing or legal fees to a solicitor or conveyancer who will have carried out the legal work on the purchase. Remortgaging is far simpler and therefore you can expect to pay far less. It is even possible to avoid paying this fee which we will show you very soon.
Mortgage Early Repayment Charges
This fee is very simple to avoid completely. When you took your mortgage out you will have received a mortgage offer from your new lender. On this offer, it would have highlighted your interest rate, monthly payment and the date your fixed or tracker rate ends. If you cannot find your physical offer, no worries you will also be able to find the date your existing deal ends on the annual statement your lender sends you every year.
It is essential that your new mortgage does not start before your existing rate ends as you will be fined an early repayment charge or fees. Most lenders charge 3% of the loan and therefore on a £150,000 mortgage will cost you a fine of £4,500. This is very easily avoided and will show a guaranteed way of avoiding paying these fees.
Mortgage Exit Fees
When you took out your existing mortgage you will have been given a mortgage offer and it will clearly show you the cost of leaving your existing lender. This varies from one lender to another however a fee of £250 is the most common fee that the different banks and building societies will charge. Although this fee is unavoidable it is possible to recoup this money when you remortgage to a new lender and we will show you how right now!
Paying too much for your mortgage?
Chances are you could save money with a better rate
The way to avoid paying any Remortgage Fees is…
Use a mortgage broker!
A mortgage broker will have access to the whole mortgage market. The mortgage broker will have access to over a hundred banks and building societies with over 14,000 different deals!
Mortgage brokers use online specialist software to search for the perfect remortgage deal for you and your situation. They will begin their search by looking for a lender offering all of the following:
- No Arrangement Fees
- No Valuation Fees
- No Legal Fees
- No Booking Fees
- Cash backs to cover the Mortgage Exit Fees
So once the mortgage broker or adviser has searched the whole market they will pick the lender that has the best remortgage deal with the lowest rates. This will help you avoid paying any fees at all.
Will a Mortgage Broker charge me a fee?
Although some brokers do charge fees for finding you a mortgage deal, many do not. To find a free broker we suggest you Google fees-free independent mortgage broker. You will now have the perfect remortgage in hand. One that will not cost you a penny! Getting this service for free is vital if your main aim is to save money and remortgage for free.
What else will a Mortgage Broker do for me?
A mortgage adviser or broker will initially search the market to get you the best deal. Once you are happy to proceed they will submit the application for you and complete most of the paperwork. The mortgage broker will talk to your conveyancer and new lender on a weekly basis until the mortgage completes making sure the new mortgage starts. This will be timed perfectly to start after your existing lenders’ early redemption charge has ended. This will help you completely avoid the early redemption fees.
Let’s make getting a Remortgage really easy!
Let me introduce YesCanDo Money.
YesCanDo Money is an independent whole of market mortgage brokers that don’t charge you for their amazing customer care. Our service is 100% FREE!
Established over 30 years ago and being family run we understand the importance of true customer care and service. Please don’t just take our word for it, have a look at the hundreds of 5 star Facebook and Google reviews we have received.
YesCanDo Money will search the whole market to find you a deal that makes it possible to remortgage for free. We will find the very best rate and deal for you whilst we do the hard work for you. We are certain we could save you money with a better rate and deal.
Frequently Asked Remortgage Questions
Is it better to add a product fee to remortgage?
This will depend on the size of mortgage you have, Lenders do tend to have two deals. One with an arrangement fee and without an arrangement fee. The one with arrangement fees will be at a lower interest rate. This will save you money on a monthly basis. However, you need to understand how much it is saving you. Although it is possible to remortgage for free, is this the best option for you? For example, if it saves you just £10 a month over 2 years you will save £240 . With the average arrangement fee being £999 this would be a bad financial decision.
Is it possible to raise extra funds when I remortgage?
As well as getting great interest rates and great deals it is the perfect time to raise a few extra funds. Lenders are happy to lend extra money to allow you, for example, to carry out home improvement to your property. It is also possible to consolidate debt with a remortgage. However, lenders will always approve home improvements more as it is an investment in the property itself. It can more than likely massively increase your property overall value.
Is it possible to raise extra funds to pay off debts?
It is possible to raise extra money to pay off credit cards and loans however this needs careful consideration. You may be adding money to your mortgage debt that you will be paying for as long as your mortgage exists. Get good sound financial advice before rushing into.
Is it a good idea to go onto the standard variable rate?
The standard variable rate can be considerably higher than a fixed or tracker rate therefore try and avoid this where possible. Get your remortgage underway 4-6 months before your early repayment fee date and you should be fine. As we have already shown you how to remortgage for free, there is no excuse to fall onto such a financially penalising rate.
Is it wise to remortgage if I intend to move soon?
Let your mortgage consultant or broker know that you intend to move and they will make sure you have a product that you can port. A portable rate simply means you can take it to your new property with you.
How long does a remortgage take?
It will normally take 2 months. It can occasionally take longer than this. Many people will start the process early to let them get the historically low interest rates available with the lenders at present. There is no harm in getting the remortgage underway up to 6 months before your existing deal ends.
Should I be on a standard variable rate?
It rarely makes financial sense for you to be paying the standard variable rate on your mortgage.
Variable rates are often more expensive than most mortgage interest rates offered by your lender. You can quickly change from an SVR to a lower rate and will save you a considerable amount of money.
Can I take a mortgage repayment holiday?
View our table of lenders and whether they offer repayment holidays or not. The table is located on the linked article in the bottom FAQs.
Who are the FCA?
All mortgage brokers are authorised and regulated by the Financial Conduct Authority FCA. This is for your protection and to make sure that the service and deal you get is the right one for you.
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