MortgageAdvice.co.uk
MORTGAGE COSTS & FEES
Taking out a mortgage can involve more than the mortgage repayments themselves. Depending on the mortgage and the property transaction, there may be fees charged by the lender, adviser, solicitor or conveyancer, surveyor and other organisations.
Understanding which costs may arise — and when — can help you plan for the wider cost of arranging a mortgage or buying a property.
MortgageAdvice.co.uk provides straightforward information and, where appropriate, can introduce you to a selected adviser who can provide regulated mortgage advice.
No obligation to proceed.
Your home may be repossessed if you do not keep up repayments on your mortgage.
THE BIG PICTURE
Mortgage and property costs can come from several different parts of the process. It can help to separate the cost of arranging the mortgage from the costs associated with the property transaction itself.
PROPERTY TRANSACTION
Buying or transferring the property
Costs associated with the legal and practical process of buying or transferring a property.
LEGAL / CONVEYANCING COSTS
PROPERTY TAXES
SEARCHES & TRANSACTION COSTS
WIDER COSTS
Other costs around the transaction
Other costs that may arise around the purchase, move or ownership of the property.
SURVEYS / INSPECTIONS
REMOVALS
INSURANCE / OTHER PROPERTY COSTS
Not every cost applies to every mortgage
The costs involved can depend on whether you are buying, remortgaging or making another change to your mortgage, as well as the lender, property and circumstances.
MORTGAGE FEES
Different mortgages can have different fee structures. The names used for individual charges can also vary.
Check what a fee is for — not just what it is called
Different lenders and firms may use different terminology. The important questions are what the charge relates to, when it becomes payable and whether it is refundable.
TIMING
Mortgage-related fees are not necessarily all paid at the same point in the process.
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DURING OR WHEN CHANGING THE MORTGAGE
During or when changing the mortgage
Other charges may arise later, depending on the mortgage and what you do with it.
The timing and treatment of a particular fee should be checked for the mortgage or service concerned.
PAYING FEES
Some mortgage-related fees may be capable of being added to the mortgage rather than paid separately, depending on the mortgage and lender.
PAYING A FEE SEPARATELY
The fee is paid from money available outside the mortgage.
ADDING A FEE TO THE MORTGAGE
The fee becomes part of the mortgage borrowing where the lender and mortgage allow this.
Adding a fee to the mortgage can increase the amount borrowed
If a fee is added to the mortgage, it forms part of the borrowing and interest may be charged on that amount while it remains outstanding.
VALUATIONS & SURVEYS
No. A lender’s mortgage valuation and a survey commissioned for the buyer serve different purposes.
LENDER’S MORTGAGE VALUATION
Part of the lender’s mortgage assessment. The lender may arrange a valuation to help it assess the property for mortgage purposes.
It is primarily for the lender’s purposes.
BUYER’S PROPERTY SURVEY
Information about the property’s condition. A buyer may separately choose to obtain an appropriate survey or inspection of the property.
This is separate from the lender’s mortgage valuation.
Do not assume the lender’s valuation is a survey for you
If you want information about the condition of a property, consider what type of survey or inspection is appropriate for the property and your circumstances.
LEGAL PROCESS
A solicitor or conveyancer usually carries out legal work connected with the property transaction and the mortgage.
Ask for the total expected legal cost
When comparing legal quotations, check which costs are included and which third-party charges or disbursements are shown separately.
PROPERTY TAX
Property transactions can involve tax depending on where the property is located and the circumstances of the purchase.
Property tax is separate from the mortgage
Any property transaction tax is part of the wider cost of buying the property rather than a charge for arranging the mortgage itself.
THE WIDER PURCHASE
Some costs of buying or moving home sit outside the mortgage and legal process.
REMORTGAGING
Yes. Changing your mortgage can involve costs as well as potentially changing the interest rate or mortgage terms.
Compare the wider cost, not one fee in isolation
When reviewing a mortgage, it can be useful to consider relevant fees and charges alongside the mortgage terms rather than looking at one cost on its own.
BEFORE YOU PROCEED
01
What fees apply to the mortgage?
Check which charges relate directly to the mortgage product or lender.
02
When does each fee become payable?
Different charges can arise at different stages of the process.
03
Is a fee refundable?
Check what happens if the mortgage or property transaction does not proceed.
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Can any fee be added to the mortgage?
If so, consider that it becomes part of the mortgage borrowing.
05
What other property-purchase costs should I allow for?
Legal work, tax, surveys and moving costs can sit outside the mortgage itself.
06
What is included in each quotation?
Check whether third-party costs and disbursements are included or shown separately.
You do not need to know every cost before speaking to a mortgage adviser, solicitor or conveyancer, but understanding what to ask can help you make sense of the quotations and information you receive.
COMMON QUESTIONS
What is a mortgage arrangement fee?
Can mortgage fees be added to the mortgage?
Do I have to pay for a mortgage valuation?
Is a mortgage valuation the same as a survey?
What legal costs are involved with a mortgage?
Does remortgaging involve fees?
MORTGAGE GUIDES
MORTGAGE ADVICE
Want to understand your mortgage options?
MortgageAdvice.co.uk can introduce you to a selected mortgage adviser who can provide regulated advice based on your circumstances.
Speak to a mortgage adviser
No obligation to proceed.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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