Remortgage Fees Explained

Arrangement Fee (Product Fee)

The arrangement fee is the most significant fee most borrowers encounter when remortgaging. It is charged by the new lender for setting up your mortgage product.

Typical cost: £0–£2,000+

When it is charged: On completion of your remortgage. Some lenders split it into a non-refundable booking fee (payable upfront) and a completion fee (payable at the end).

Can you avoid it? Yes — many lenders offer fee-free products, though these typically come with a slightly higher interest rate. Whether a fee-free product or a fee-paying product is better value depends on your mortgage balance and the deal period.

Can you add it to the mortgage? Most lenders allow you to add the arrangement fee to your mortgage balance rather than paying it upfront. This spreads the cost but means you pay interest on the fee for the life of the mortgage, increasing its true cost.

Key tip: When comparing deals, always look at the total cost (interest payments plus fees) over the deal period, not just the headline rate or the fee in isolation.

Valuation Fee

The valuation fee covers the cost of the lender having your property valued to confirm it provides adequate security for the mortgage.

Typical cost: £0–£1,500 (depends on property value)

When it is charged: During the application process, usually before the mortgage offer is issued.

Can you avoid it? Many remortgage deals include a free valuation, where the lender covers the cost. Some lenders use automated desktop valuations, which cost the lender very little and are therefore commonly offered for free. Deals that require a physical valuation and charge you for it are less common for straightforward remortgages.

Is it refundable? If you pay for a valuation and the application does not proceed, some lenders will refund the fee, but many will not. Check the lender's policy before paying.

Key tip: A free valuation can save you several hundred pounds. Prioritise deals that include one, especially for higher-value properties where valuation fees are more substantial.

Legal Fees (Conveyancing Costs)

Legal fees cover the cost of a solicitor or licensed conveyancer handling the legal transfer of the mortgage from your old lender to the new one.

Typical cost: £500–£1,500 (including solicitor's fee and disbursements)

When it is charged: Throughout the conveyancing process. The solicitor's fee is usually payable on completion, while disbursements (search fees, Land Registry fees) may be requested upfront.

Can you avoid it? Many remortgage deals include free legal work, where the lender appoints and pays a panel solicitor. This is one of the most valuable incentives available and can save you a substantial amount.

What is included in free legal work? The free service typically covers the standard conveyancing work — title checks, property searches, redemption of the old mortgage, and registration of the new one. If complications arise (such as title defects), the free service may not cover the additional work needed, and you could face supplementary charges.

Key tip: If you are paying for your own solicitor, get quotes from several firms. Prices vary significantly, and the cheapest is not always the best value. Look for experience, good reviews, and transparent pricing.

Early Repayment Charge (ERC)

An early repayment charge is levied by your current lender if you pay off your mortgage before the agreed deal period ends.

Typical cost: 1%–5% of the outstanding mortgage balance

When it applies: Only if you leave your current deal before it expires. If your deal has ended and you are on the SVR, there is no ERC.

Can you avoid it? Yes, by waiting until your deal period has expired before remortgaging. Most homeowners time their remortgage to coincide with the end of their current deal specifically to avoid the ERC.

Is it ever worth paying? In some cases, yes. If interest rates have dropped significantly since you took out your current deal, the savings from a lower rate might outweigh the ERC, particularly if you have several years left on your current deal. A broker can help you calculate whether this makes sense for your situation.

Key tip: Check your mortgage terms carefully before starting the remortgage process. Know exactly when your deal expires and what the ERC schedule looks like. Some ERCs reduce over time (for example, 5% in year one, 4% in year two, and so on), so waiting a few months could significantly reduce the charge.

Exit Fee and Deeds Release Fee

The exit fee (sometimes called a deeds release fee or mortgage discharge fee) is charged by your current lender when you pay off your mortgage and they release their legal charge on your property.

Typical cost: £0–£300

When it is charged: At the point of redemption, when your existing mortgage is paid off.

Can you avoid it? Not all lenders charge an exit fee, and some have been pressured by regulators to reduce or waive them. It is worth checking whether your lender charges one, as it may influence your decision on timing.

Key tip: While the exit fee is relatively small compared to other remortgage costs, it is still worth factoring into your overall cost calculation. Some older mortgages have higher exit fees than newer ones.

Broker Fees and Other Potential Costs

Broker fee: If you use a mortgage broker, they may charge a fee for their advice and service. This can range from £0 (fee-free brokers who earn commission from lenders) to £1,000 or more for specialist advice.

Mortgage account fee: Some lenders charge a small fee for maintaining your mortgage account. This is typically a nominal amount (£10–£50 per year) and is not specifically a remortgage cost, but it is worth being aware of.

Higher lending charge: If your LTV is above a certain threshold (usually 75% or 80%), some lenders may charge a higher lending charge to cover the additional risk. This is less common than it used to be, as most lenders now build this into the interest rate instead.

Buildings insurance: While not a remortgage fee as such, you will need buildings insurance in place, and the new lender may have specific requirements. If you need to change your insurance policy, there may be costs involved.

When budgeting for your remortgage, create a list of all potential costs and check which ones apply to your chosen deal. The total cost should then be weighed against the savings you will achieve from the new rate.