2 How much will it cost?
The main costs you might face when remortgaging are:
Early repayment charges
ERC's are a penalty for leaving the mortgage before it comes to term, often calculated as a percentage of your loan value. Your lender will be able to advise you on any ERCs that apply.
Average cost: 1-5% of mortgage. So an outstanding balance of £100,000 could incur a charge between £1,000 to £5,000
Lender’s arrangement fee
The administrative costs of organising your mortgage. This could be a flat fee or a percentage. Your lender will be able to advise of arrangement fees that apply to your mortgage.
Average cost: £0 - £2,000+
Higher lender charge
If the mortgage you are taking out is a sizable percentage of the property value (typically >90%), lenders may add a charge to insure themselves in case you default.
Average cost: 1.5% of the mortgage, so £3,000 on a £200,000 mortgage.
Cost of hiring a surveyor to assess the property’s condition and value.
Average cost: £150 - £1,500 depending on the value of the property
Cost of hiring a solicitor for the process of preparing the deeds and carrying out the conveyancing process.
Average cost: £500 - £1,500 plus VAT
An one-off application fee for the mortgage, “booking” or reserving the capital while processing your request.
Average cost: £99 - £250