Mortgage costs and fees guide
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.
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 Money Advice Service, 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 Money Advice Service.
- 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 – You won’t be charged Stamp Duty if the home you’re buying is valued at less than £500,000, until the 31st of March 2021. 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.
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
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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