Remortgaging is usually a lot cheaper than rolling onto your lender’s default rate. The upfront costs are minimal because many of the fees can be covered by the lender. If you don’t remortgage, you could pay a lot more interest than you need to. In this article, we’ll explain everything you need to know about the fees involved with a remortgage.
Can I Remortgage With My Current Lender?
Remortgaging with your current lender may seem like a good idea, it’s quite easy to do and it means you won’t roll onto the default rate. But usually, you’ll get a better rate by switching to a new lender.
Most of us understand this concept already, we know it’s good practice to shop around when our car insurance or phone contract runs out. We know a small amount of time and effort can save a lot of money. With your remortgage, the stakes are much higher. Finding the most suitable deal available can save a huge amount of money and open up plenty of opportunities.
The good news is, a mortgage advisor can help you find a great rate and the right deal. You may not have to pay for this, but if you do, you’ll only commit once you’re confident they can save you enough money and time to justify any fee.
What Are the Costs of Remortgaging With a New Lender?
There are some potential fees involved when remortgaging with a new lender. But the lender will likely pay some of these for you, so your remortgage may not cost as much as you think.
Early-repayment Fee
This fee usually won’t apply because most people remortgage at the end of their fixed-rate period. Your lender should never charge you a fee to remortgage once your fixed-rate period is over.
If you do have to remortgage during your fixed-rate period, then make sure you check the terms & conditions of your current mortgage. If an early-repayment fee is included in your contract, it will usually be between 1-5% of the remaining loan.
Valuation Fee
When remortgaging, lenders need an up-to-date valuation of your property. The good news is that if the lender wants your business they’ll usually cover this fee for you, so your valuation should be free of charge.
Solicitor Fee
When remortgaging to a new lender, you’re taking out a new mortgage, and therefore a solicitor is required. But there’s more good news. Your new lender will usually cover this fee as well or offer you cashback to reimburse your legal costs. So this is another fee you may not have to worry about.
Mortgage Arrangement/Product Fee
Some mortgage products require an arrangement fee, sometimes called a product fee, which can be up to £995. But many products have no fee at all.
It’s important to look at the overall cost of a mortgage when deciding which deal to go for. Usually, the products which don’t charge an arrangement fee have a higher interest rate, and the ones that do charge a fee have a lower interest rate.
Sometimes it might make sense to choose a mortgage with an arrangement fee if it means you’ll pay less in the long run due to the lower interest rate. But in some cases, a free product with a higher interest rate may be the best option. This is where seeking professional mortgage advice can save you a lot of money.
Mortgage Broker Fee
We’ll discuss the cost of our service here, as we can’t speak for other mortgage brokers.
With remortgages, Our standard fee is £295. There may be some cases where a higher fee is required, for example, if you have a bad credit score making the case difficult to place or some other issue that requires a bit more work however we will be completely transparent so you know all the facts from the start.
Your initial consultation is always free of charge. Once we know a bit more about your case, we’ll tell you whether a fee will be required or not, so you can make an informed decision.
During your free consultation, your professional advisor will work out what options are available to you. They’ll find you the right deal based on your circumstances, from the whole market of lenders.
This is a no-obligation meeting. If you decide not to continue with us you’ll have gained valuable knowledge and lost nothing. In most cases, our customers continue with our service because they realise the savings are well worth it.
We save you money by getting you the most suitable deal, and time and hassle by handling the application for you.
The Bottom Line
The upfront cost of remortgaging is quite low, as many of the fees are covered by the lender.
- If you get a mortgage product without an arrangement fee, you may not have to pay anything to remortgage.
- If you get a mortgage product with an arrangement fee, the highest you can expect to pay is around £995.
- You will pay a £295 Broker fee for us finding you the most suitable product for your needs. We do the hard work for you whilst offering excellent customer service.
The cost of remortgaging can pay for itself, as you’ll usually save money by switching to a cheaper deal.
It doesn’t cost you anything to chat with us and discuss your options. Once you see what you could save, you may decide that remortgaging is a no-brainer!
