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How Much Does It Cost to Remortgage in the UK?

A homeowner remortgages their house by switching their mortgage deal to a new mortgage lender. As a result, you could get better interest rates which, in turn, could reduce how much interest you pay overall. But how much does it actually cost to remortgage? The YesCanDo Money team is here to help explain.

There are a few different costs and fees that you’re likely to come across when remortgaging. It’s vital that you understand what these additional remortgaging costs are so you can confidently decide whether it’s worth it or not. 

We’re here to simplify things for you. Here are some of the most common remortgaging costs, what they are, why you might have to pay it, and some tips on how to approach them.

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?

We believe that professional advice should be accessible to everyone. In an age where mortgage options can be easily found online, it’s crucial that clients receive proper guidance to avoid choosing the wrong mortgage.

By being a free mortgage broker offering a mostly fee-free service, we remove financial barriers and provide professional, regulated advice. Occasionally, we charge fees for cases that require extensive research. We always inform clients of any fees before they’re incurred.

Cost of remortgaging FAQs

Every time you remortgage your home with a new mortgage lender, you’ll have to pay a number of fees. These can include an arrangement fee, a valuation fee, and an early repayment fee. The amount you have to pay will depend on your lender and the type of mortgage you have.

If you’re thinking of remortgaging your home, it’s important to compare the costs from different mortgage lenders. This way, you can make sure you’re getting the best deal possible.

YesCanDo Money will search the whole of market to source the best mortgage rates possible, ensuring your fees are kept as low as possible. The best part? Our remortgage advisory service is fee free for 9 out of 10 of remortgage cases.

If you have a fixed-rate mortgage, it is often possible to remortgage with the same mortgage lender without incurring as many costs. This is due to the fact that the remortgage is generally treated as a product transfer rather than an additional service. 

It is worth checking first as depending on the type of mortgage, you may be required to pay some closing costs when you remortgage with the same lender.

If you’re staying with the same mortgage provider, you won’t need to pay any solicitors. However, if you are switching to a new provider, they will employ a solicitor at no cost to you to facilitate the transfer of the title deeds. 

YesCanDo Money’s FEE-FREE service takes care of all the bank and solicitor chasing for you, ensuring a hassle-free experience.

Remortgaging with YesCanDo Money

If you’d like more information on how the YesCanDo Money team can help you with remortgaging, you can get in touch with us today.

You can chat to an advisor through WhatsApp right now, or you can call us to speak to a member of our team directly. Our advisors are committed to helping you make the best decisions about your mortgage.

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