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MORTGAGES - WHAT ARE THE FEES AND COSTS?
Buying a property can be an expensive project, but the costs involved in getting a mortgage need not be.
All mortgage-related fees which you'll have to pay will be set out clearly in the Key Facts Illustration (KFI) that we give you. We must give you a KFI before you pay any fees related to the mortgage application.
But this won't include other costs such as Stamp Duty Land Tax or your conveyancing fees, so use the table below to see what else you might have to pay, and look at our calculators.
What will you have to pay? (These are shown in the Key Facts Illustration- KFI)
| Fee Or Charge |
What For? |
How Much? |
Mortgage broker fee |
For arranging the mortgage or providing you with advice. |
See our fees section. We may get commission from the lender as well. |
Mortgage booking fee or mortgage arrangement fee |
A commitment or administration fee usually payable to the lender to reserve the mortgage funds. |
Varies, but usually between £250-£1500. |
Valuation fee |
To assess that the property is appropriate security for the mortgage. |
Depends on lender and value of property. |
Higher lending charge |
To get insurance cover in case you don't pay the mortgage, and they repossess your home and have to sell it at a loss. |
Depends on how much you borrow and the size of your deposit. |
Fee to insure your property |
If you do not insure your property through the lender. |
Typically £25-£50 but may be payable yearly or each time you change insurer. |
Telegraphic transfer |
For your solicitor if you've arranged to transfer the mortgage funds electronically the same day. |
Typically £40-£50. |
Re-inspection fee |
If the lender needs to re-inspect the property after the original valuation, usually to check if you've made agreed repairs. |
Typically £50-100. |
Early repayment charge |
If you repay your mortgage early. |
Depends on the terms and conditions of your mortgage and the size of your loan. |
Fees to repay the mortgage |
For your lender when you finally repay your mortgage. |
Typically £75-200 as-well as any early repayment charge. |
What will you have to pay? (These are not shown in the Key Facts Illustration- KFI)
| Fee Or Charge |
What For? |
How Much? |
Estate agency fee |
Marketing and selling your home. |
Typically 1-3% of the selling price; ask for a quote. |
Stamp Duty Land Tax |
Tax payable to the government when buying. |
Varies depending on purchase price. See this calculator. |
Legal fees |
For solicitor for searches, land registry etc. |
Budget for at least £400 - ask for a quote. Payable for both buying and selling a property. |
Survey fee |
To the Surveyor if you want a more detailed report on the property. |
Varies according to surveyor and type of report - ask for a quote. |
Can any fees be added to the mortgage?
Often you can add certain fees payable to the mortgage broker and mortgage lender to the mortgage. This can help with the initial cost of the mortgage but will cost you more in the long run as you will pay interest on the fees. If you want to do this ask us to provide you with a KFI with the fees added, and another with the fees not added to the mortgage.
Compare the costs in Section 5 and Section 6 of the KFI before making a final decision.
Incentives
Lenders sometimes offer incentives which reduce the cost to you of taking out the mortgage. This can range from a free valuation or legal fees paid to a cashback incentive. If you want to pay off your mortgage early, you may have to pay back the value of these.
Check Section 10 of the KFI for this. Always compare the costs of mortgages with these features to those without. Often those without incentives will be cheaper in the long run.
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