The decision to remortgage is one that should never be taken lightly. If you are looking to remortgage and are on the search for better rates then here are some of the steps to be aware of.
If you are considering remortgaging, make sure to contact our independent advisers who will consider all your circumstances as well as available deals before offering impartial advice about which remortgage options are right for you.
In today's competitive market, many borrowers choose to remortgage (switch their current mortgage for a new deal, either with their existing lender or a new lender) every few years in order to take advantage of the new rates and products on offer or to fit changing life circumstances.
The main costs you might face when remortgaging are:
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
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+
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
Costs and charges supplied by the Money Advice Service. The details above were correct at the time of publication.