Mortgage costs and fees guide

Couple working out their mortgage costs and fees.

Who is this page for?

If you’re a first time buyer or a homeowner who’s thinking about moving, find out all you need to know about mortgage costs here. 

Mortgage costs and fees explained

We’ve broken down the various costs you need to think about when taking out a mortgage.

These include any upfront charges – such as admin and broker fees – as well as regular monthly repayments. The exact amount of money you’ll pay on your mortgage depends on your mortgage terms and the type of mortgage you have.

Our guide can help you work out roughly how much your mortgage will cost, including any mortgage closing costs.

Mortgage fees and costs you might pay

Before your mortgage is approved, you’ll probably have to pay a handful of fees. You can find these in the terms of your mortgage.

You might be able to roll some of these into the overall mortgage cost. The most common charges include:

  • Arrangement fee – This is the main fee you’ll pay and covers the costs of setting up your mortgage. According to the MoneyHelper, this can cost up to £2,000. You might be able to add this to your monthly repayments, but this could result in you paying interest on the fee.
  • Valuation cost – Your provider will run their own valuation of your home as part of the mortgage process. These range from a few hundred pounds to over £1,000 depending on the value of the house, according to the MoneyHelper.
  • Booking charge – Some lenders may charge to secure a mortgage rate. This is often a couple of hundred pounds and will be paid upfront.
  • Transfer fee – Typically less than £100, this allows the lender to transfer the loan amount to your solicitor.
  • Stamp Duty – From 23rd September 2022, if you’re buying a residential property in England and Northern Ireland, you will not have to pay Stamp Duty on the first £250,000 of a property’s purchase price. The amounts differ if you are a first time buyer. Find out more with our guide on understanding Stamp Duty.

Monthly mortgage repayments

Once you’ve set up your mortgage, completed the purchase, unpacked and settled in, you’ll need to start paying your monthly repayments.

Monthly repayments example

You take out a mortgage of £200,000 on a home valued at £250,000. Over a 25-year period with mortgage rates between 2.5% and 3.5%, you can expect to pay around £900 – £1,000 per month, depending on your mortgage rates.

If you want to get an estimate of your monthly repayments, try our mortgage calculator.

Costs when leaving a mortgage deal

It might seem a long way off, but one day you’ll reach the end of your mortgage payments. Or you’ll be in a position to pay off the remainder of your mortgage early.

When your mortgage term ends and it’s been repaid in full, you may pay an exit fee to close your account. This is typically a couple of hundred pounds and is sometimes included in your initial arrangement fee.

If you port your mortgage – which is where you take out another mortgage on a new home and use the same lender – you may have to pay an admin fee.

Additionally, if you choose to repay your mortgage earlier, you may have to pay an early repayment charge. This is usually calculated as a percentage of the mortgage loan, often between 1 and 5%.

To fully understand the costs, check out our guide on paying off a mortgage early.

The content on this page is for reference and does not constitute finance advice.

For impartial financial advice, we recommend government bodies like the MoneyHelper.

Calculators & tools

We have a range of mortgage calculators to help you:

  • Find out how much you could borrow from Lloyds Bank
  • See how much you could save if you make overpayments on your mortgage
  • Get an idea how a change to the Bank of England Base Rate could effect your monthly payments

Use our mortgage calculator and tools >

Need to speak with someone?

You can talk to us over the phone or use our mortgage video service from the comfort of your own home.

Contact us

Important legal information

Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065. Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278.

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