How Much Does It Cost to Remortgage in the UK?

An arrangement fee is always a remortgaging cost. It’s essentially an admin charge from a bank for arranging credit. However, arrangement fees aren’t just restricted to mortgages – they appear in any type of loan from a bank, including business loans and car finance. 

Any mortgage product that’s offered to you will have at least one mortgage fee, although sometimes there might be two – the mortgage arrangement fee and the mortgage booking fee. Despite this, we do still refer to these two costs as arrangement fees. 

But how much will the arrangement fee be? Well, it varies. But, to give you a ballpark estimate, you can probably expect to pay at least £1000 to secure an attractive mortgage rate. Arrangement fees for a mortgage could also be up to 1% of your mortgage value which could be quite expensive. 

Arrangement fee tips

You can pay you arrangement fees in one of two ways: 

• You can pay it off straight away when you get your mortgage
• You can add it on to your mortgage

One of these options might suit you more than the other, so it’s all about doing what’s best for you in this scenario. That being said, one thing that might help you make this decision is knowing that, if you add this on to your mortgage costs, then the amount of your arrangement fee will gain interest. 

If you repay your mortgage during a tie-in period, or simply overpay, then you could face early repayment charges. But why is this the case?

Lenders normally make you sign an agreement saying that they want you to pay off a certain amount over a certain period and, if you break this, then you’ll be penalised with an early repayment charge. 

As for the price of early repayment charges, it can vary. The charge is often a percentage of the outstanding mortgage debt which then reduces the longer you stay with it. We always recommend calculating what your early repayment charge would be if you’re planning on paying or overpaying some of your loan back. 

Can I avoid early repayment charges?

Early repayment charges can be avoided though. Just make sure that your remortgage completes after your current tie-in period ends – this is normally when we’d suggest starting to pay more of your mortgage back. 

A deeds release fee is a cost that’s only related to remortgaging. It’s best thought of as another admin charge that goes to your existing lender so they can then pass on the property’s title deeds to your solicitor. 

Many lenders will give you the chance to pay this remortgage cost upfront when the mortgage is first set up. Alternatively, you can pay this at the end of the mortgage that you’re leaving. 

How much will a deeds release fee cost and can I avoid it?

Most lenders will charge this fee, but not all of them, so it is possible to avoid this remortgaging cost entirely. If you are asked to pay a deeds release fee, it’s going to cost you roughly £50-£300. 

We have heard stories about lenders trying to charge their customers more than what was initially agreed. If this happens to you and the higher cost was never communicated to you in writing, then your lender has no reason to be charging you more. 

Valuations are needed whenever a property is bought, sold or refinanced. It’s quite an involved and detailed process so there are fees associated with a valuation. Some remortgaging packages give you this for free, but they can cost around £300-£500. 

Your valuation fee is usually paid when you apply for a mortgage, alongside the mortgage booking and mortgage arrangement fees. 

How do I avoid valuation fees?

As we’ve mentioned, valuation fees can’t be avoided, but some lenders will waive this fee as part of their remortgaging package. 

If you’re using a mortgage broker to help you with remortgaging your home, then you can expect some additional costs. But what can you expect to be paying?

If your broker charges a fee for their services, you can expect to be paying up to %1 of the loan amount. As you can imagine, this could get expensive. But, if your broker takes commissions, they might be willing to reduce your fee if they are getting a decent amount through commissions. 

What to look out for with mortgage brokers

Some brokers will ask for their fee upfront, but this is something that might hurt you further down the line. If you do decide to pay fees in advance, then you could lose out on your money if you choose not to go ahead. If you can, ask to pay the fees when the mortgage completes.