Fees and Costs

Mortgages - What are the fees and costs?

Buying a house is an expensive project, but the costs involved in getting a mortgage need not be.

All mortgage related fees which you'll have to pay will be set out clearly in the key facts illustration (KFI) that the lender or our adviser gives you. They must give you a KFI before you pay any fees related to the mortgage application.

But this won't include other costs such as stamp duty or your conveyancing fees, so use the table below to see what else you might have to pay.

Adding fees to the mortgage

Often you can add certain fees charged by the broker and lender to the mortgage. This can help with the initial cost of the mortgage but will cost you more in the long run as you will pay interest on the fees. If you want to do this ask your adviser to give you a KFI on this basis or if they have already done that, ask for one where the fees are not added.

Compare the costs in section 5 and section 6 of the KFI before making a final decision.

Incentives

Lenders sometimes offer incentives which reduce the cost to you of taking out the mortgage. This can range from a free valuation or legal fees paid to a small or large cashback. If you want to pay off your mortgage early, you may have to pay back the value of these.

Check section 10 of the key facts illustration for this. Always compare the costs of mortgages with these features to those without. Often those without will be cheaper in the long run.

What will you have to pay? (these will be shown in the key facts illustration)

Fee or charge	What for?	How much?
Mortgage broker fee	For arranging the mortgage or providing you with advice.	We may receive commission from the lender and may also charge a fee for the advice. This will typically be between £0 - £350, depending on the level of commission earned from the lender. If the level of commission is sufficient, we may not charge you any fee for the advice.
Mortgage booking fee or mortgage arrangement fee	A commitment or administration fee usually payable to the lender to reserve the mortgage funds.	Varies but typically £100-£500.
Valuation fee	To assess that the property is appropriate security for the mortgage.	Depends on lender and value of property.
Higher lending charge	To get insurance cover in case you don't pay the mortgage, and they repossess your home and have to sell it at a loss.	Depends on how much you borrow and the size of your deposit.
Fee to insure your property	If you do not insure your property through the lender.	Typically £25 but may be payable yearly or each time you change insurer.
Telegraphic transfer	For your solicitor if you've arranged to transfer the mortgage funds electronically the same day.	Typically £40-£50.
Re-inspection fee	If the lender needs to re-inspect the property after the original valuation, usually to check if you've made agreed repairs.	Typically £50-100.
Early repayment charge	If you repay your mortgage early.	Depends on the terms and conditions of your mortgage and the size of your loan.
Fees to repay the mortgage	For your lender when you repay your mortgage.	Typically £75-200 as-well as any early repayment charge.

The table below sets out the other fees and charges you might have to pay.

Fee or charge	What for?	How much?
Estate agency fee	Marketing and selling your home.	Typically 1-3% of the selling price; ask for a quote.
Stamp duty	Tax payable to the government when buying.	Varies depending on purchase price.
Legal fees	For solicitor for searches, land registry etc.	Budget for at least £400 - ask for a quote.
Survey fee	To surveyor if you want a more detailed report on the property.	Varies according to surveyor and type of report - ask for a quote.

Your propertyhome may be repossessed if you do not keep up repayments on your mortgage.

 The Financial Services Authority (FSA) does not regulate some forms of mortgage.