How Much Does it Cost to Remortgage?

Who is this page for?

If you are a homeowner and wondering how much it costs to remortgage, this page is for you.

Remortgaging costs: How much does it cost to remortgage?

Remortgaging is when you switch your mortgage deal to a new lender. By doing so, you could get better interest rates, which could reduce how much interest you pay.

Why remortgage?

There are lots of reasons to remortgage:

  • Save money. You might be able to pay less each month if you remortgage
  • Flexibility. A new deal might mean you’re able to overpay more than you can now, or take a mortgage holiday

You’ll also need to pay some fees and charges when you remortgage. Make sure you think about whether remortgaging is right for you. You might find that the potential savings outweighs the costs of any fees, but this isn’t always true.

What fees will I pay when I remortgage?

You should be aware of all the potential fees you might have to pay when you remortgage.

These are some of the fees you might have to pay.

  • Early repayment charge. You may be charged an early repayment charge for leaving your existing lender within the terms of your mortgage deal. This is usually between 1% and 5% of your remaining mortgage cost.

To try and avoid paying this fee, remortgage once your deal has run out and you’re due to be placed onto a standard variable rate.

  • Deeds Release fee. Your existing lender may charge a fee for sending the deeds of your house to your new lender.

Different lenders will charge different fees. Some may offer cheaper rates or free valuations as a way of enticing new customers. Consider whether the overall costs of remortgaging are worth it, and whether it is right for you.

  • Legal fees. You will need to hire a solicitor to complete the legal paperwork. They will help you handle all the details and make sure your mortgage deal is switched over correctly.

Some lenders offer their own legal services as part of a remortgaging deal.

  • Valuations. You might need to get your house valued to see how much it is currently worth. This can help you work out how much you could save.

Your new lender will also need to value your home. The cost of getting a new valuation will differ depending on the size of your house.

  • Booking fees. Some lenders will charge this upfront and it pays for ‘booking’ the mortgage while the application goes through. It can also be called a reservation or application fee.
  • Arrangement fees. These fees cover the lender’s management costs and can be quite costly. You can usually spread the costs over your mortgage term.

Not all lenders will charge an arrangement fee. Some may also let you pay the cost upfront if you prefer.

Remember that by spreading the costs over your monthly payments, you will pay interest on the amount due. You won't have to pay any interest if you decide to pay upfront.

If you remortgage to Lloyds Bank, we'll pay legal basic fees, the cost of valuation and won't charge booking or arrangement fees. We sometimes charge a product fee.

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

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

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