Remortgaging Costs Explained – A Practical Guide for UK Homeowners

Thinking about switching your mortgage? Before you sign anything, you need to know what you’ll actually pay. Remortgaging can save you money on interest, but hidden fees can eat up those savings fast. Let’s break down the main costs so you can decide if a remortgage makes sense for you.

What Costs Show Up When You Remortgage?

Most lenders charge a handful of standard fees. The biggest ones are the arrangement fee (often called a set‑up fee), which can be a flat £0‑£1,000 or a percentage of the loan. Then there’s the valuation fee – the lender wants to know the current value of your property. Expect £150‑£300 for a basic valuation, more if you need a full survey.

Legal fees are another unavoidable expense. Your solicitor or conveyancer will handle the paperwork, and prices usually range from £500‑£1,200. Some lenders offer a “no‑fee” deal, but they may add the cost to the loan amount, meaning you pay interest on it later.

How to Keep Remortgaging Costs Low

Shop around. Different banks and building societies have very different fee structures, and many now publish transparent fee tables online. Use comparison sites to spot the lowest arrangement fees and see if any lenders waive the valuation for existing customers.

Ask about fee‑only deals. Some providers let you pay the arrangement fee upfront, which can be cheaper than rolling it into the mortgage. If you have a strong credit score, you might even negotiate a reduced fee – it never hurts to ask.Consider the total cost, not just the interest rate. A lower rate looks great, but if the lender charges £2,000 in fees, you could end up paying more over the life of the loan. Use a simple spreadsheet: add up the arrangement fee, valuation, legal costs, and any early‑repayment charges from your current mortgage. Compare that total against the interest you’ll save.

Watch out for early‑repayment penalties. Most fixed‑rate deals have a break‑cost if you exit before the term ends. The charge is usually a few months’ interest on the remaining balance. If you’re close to the end of your current term, waiting a few months can avoid a hefty penalty.

Finally, think about timing. Lenders often run promotional offers with reduced fees during certain months. If you can be flexible, you might lock in a better deal simply by waiting for a seasonal promotion.

Remortgaging isn’t just about a lower interest rate – it’s about the whole package of fees and how they affect your budget. By understanding each cost, comparing offers, and negotiating where you can, you’ll avoid surprise expenses and make the most of your mortgage move.