Costs and Fees When Remortgaging: What You Really Need to Know in 2025

Costs and Fees When Remortgaging

Remortgaging is a powerful financial tool that can help you save money, release equity, or secure a better deal. Understanding the full cost of the process is just as important as the interest rate you’re offered. Many borrowers are caught off guard by unexpected fees or make decisions based solely on rates, only to find the real costs stack up elsewhere.

How much does it cost to remortgage? The cost to remortgage can range from a few hundred pounds to much more, depending on your individual circumstances and the specific fees involved.

As experienced mortgage brokers, we always advise our clients to look at the total cost of remortgaging, not just the headline rate. The cost to remortgage is not just about interest rates, it’s also about understanding all the fees and charges that may apply.

For some borrowers, the total cost may be just a few hundred pounds, making remortgaging a very affordable option. In this guide, we’ll break down all the typical (and hidden) costs you might encounter when switching your mortgage.

Introduction to Remortgaging

Remortgaging means switching your existing mortgage to a new mortgage deal, either with your current lender or by moving to a new lender. Homeowners often choose to remortgage to save money on monthly repayments, secure a better interest rate, or adjust the terms of their mortgage to better suit their needs.

Working with a mortgage broker can make the remortgaging process much smoother, as they can help you compare remortgage deals, understand arrangement fees, and navigate the various costs and fees involved.

Whether you’re looking for a new mortgage deal to reduce your interest rate or simply want to change your mortgage term, it’s crucial to factor in all potential expenses, such as valuation fees and early repayment charges. This is so you can make an informed decision and truly save money in the long run.

 The Main Costs When Remortgaging

1. Arrangement Fee (Product Fee)

• What is it? A fee charged by the lender for setting up the mortgage product. Arrangement fees cover the lender’s management costs and administrative expenses.
• Typical range: £0 – £2,000+
• How it works:
• Some lenders charge a flat fee for arrangement, while others may base it on a percentage of the loan amount.
• Can usually be paid as a fee upfront or added to the mortgage. If you pay the fee upfront, you avoid paying interest on it. If you add it to the mortgage, you’ll be paying interest on the fee over the term, which increases overall costs.
• Fixed-rate and tracker deals with low interest rates often come with higher fees.
• Sometimes a slightly higher rate with no fee can be cheaper overall, speak to a broker for a full cost comparison.

2. Valuation Fee

• What is it? A mortgage valuation required by the lender to assess the value of your property. This is a key part of the remortgage process, as the lender uses the mortgage valuation to determine your loan terms.
• Typical cost: £0 – £500+ (valuation costs can vary significantly depending on the property’s value and size)
• What to know:
• Many lenders offer free valuations as part of remortgage packages, but valuation fees vary depending on the lender and the type of property.
• Fees vary depending on factors such as the property’s size, value, and the surveyor used, with valuation costs typically ranging from about £250 to £1,500.
• More complex or high-value properties may require a more in-depth valuation at a higher cost.

3. Solicitor / Legal Fees

• What is it? Legal work is required to switch lenders (even though you’re not buying), and solicitors handle the legal paperwork needed to transfer the mortgage and update property deeds.
• Typical cost: £300 – £1,000 (can be higher for leasehold or complex cases).
• Free Legal Package: Many lenders include this in their remortgage offers.
• Cashback Legal Option: You use your own solicitor and the lender gives you cash to cover the cost (often £250–£500).
• Pay Your Own Legal Fees: Preferred when you want a quicker or more responsive solicitor.

Remortgage legal fees are usually lower and less complex than those for your original mortgage, as the process involves fewer steps. Part of the legal fees covers administration costs for processing the remortgage and handling all required documentation.

4. Broker Fee

• What is it? Charged by a mortgage broker for researching and securing your new mortgage deal.
• Typical cost: £0 – £995+ (varies by broker and complexity)
• When it applies: Some brokers will charge part of the fee at application submission and the rest on mortgage offer.
• Fee-free brokers often receive commission from the lender.
• More complex cases (e.g., bad credit, self-employed, multiple incomes) may incur a fee due to the extra work involved.
• Additional detail: Broker fees can be flat rates of £300 to £600 or a percentage of your mortgage amount. Always ensure you are getting a suitable deal for your needs, and be cautious of brokers who require upfront fees without offering clear value.
• At Option Finance, we’re fully transparent about all broker fees and offer competitive rates with no hidden costs.

5. Early Repayment Charge (ERC)

• What is it? A penalty for leaving your current mortgage deal before the end of the fixed or discount period. If you are on your lender’s standard variable rate (SVR), you may not have to pay an early repayment charge when remortgaging, as ERCs typically do not apply to borrowers on the lender’s SVR.
• Typical cost: 1% – 5% of your outstanding mortgage balance.
• Example: Leaving a 5-year fixed deal in year two with a 3% ERC on a £200,000 mortgage = £6,000 charge.
• Always check your current mortgage paperwork or ask your broker to confirm any ERCs before applying.

6. Exit / Deed Release Fee

• What is it? A fee charged by your current lender for closing down your existing mortgage account. This fee is sometimes called a deeds release fee, mortgage release fee, discharge fee, exit fee, or mortgage exit fee. The deeds release fee covers the cost of transferring the title deeds from the existing lender to the new lender.
• Typical cost: £75 – £300
• Also known as: Mortgage Exit Fee, Final Redemption Fee, Admin Fee, Deeds Release Fee, Discharge Fee, Mortgage Release Fee, Exit Fee
• Additional detail: Admin fees (also known as deeds release fees) typically range from £50 to £300. Lenders impose these exit fees as part of the administrative process when you pay off or switch your mortgage. Some lenders may charge a mortgage exit fee of up to £300 when you pay off your mortgage. The amount and naming of these fees can vary between lenders, and they are typically charged by your existing lender.

Booking Fee and the Application Process

When you apply for a new mortgage deal, you may encounter a booking fee, sometimes called a reservation fee. This is a non-refundable charge, typically ranging from £100 to £300, paid upfront to secure your chosen remortgage deal. The booking fee ensures that your new mortgage deal is reserved while your application is processed.

After paying the booking fee, you’ll need to provide your lender with detailed financial information and supporting documents as part of the application process. A mortgage broker can be invaluable at this stage, helping you gather the right paperwork and avoid common mistakes that could delay your remortgage.

It’s also important to be aware of the lender’s management costs, as these can affect the overall value of your remortgage deal. By understanding all the steps and fees involved, you can move through the application process with confidence and secure the best new mortgage deal for your needs.

Optional Remortgage Extras (That Can Add Cost)

Real-Life Example – Comparing Two Deals

Conclusion: Deal B is cheaper overall despite the higher rate, because there’s no arrangement fee. When comparing the best remortgage deals, it’s important to look at both the mortgage rate and any fees to see if switching makes financial sense overall.

Summary Table of Typical Remortgage Costs

The Benefits of Remortgaging in 2025

Remortgaging in 2025 offers a range of benefits for homeowners looking to improve their financial situation. By switching to a new remortgage deal, you could save money on your monthly repayments, lock in a more competitive interest rate, or adjust your mortgage term to better fit your goals.

With the support of a mortgage broker, you can compare the latest remortgage deals and avoid paying unnecessary arrangement fees or valuation fees. Many lenders now offer fee free remortgage options, which can help reduce your upfront costs and make the process more affordable.

Using a remortgage calculator, you can quickly see how different deals stack up and identify the one that offers the best value for your circumstances. By understanding all the costs and fees involved, you’ll be well positioned to make a smart, informed decision and take full advantage of the opportunities remortgaging can offer in 2025.

Final Thoughts: Know Before You Switch

Remortgaging can be a smart financial move, but only if you fully understand the fees involved. A low interest rate doesn’t always mean the lowest overall cost. You need to pay attention to all the fees and charges associated with leaving your existing mortgage deal. This includes broker fees, legal fees, and any early repayment charges.

That’s why we take a holistic approach, comparing lender fees, legal incentives, rate types, and your future plans to ensure the remortgage works for your unique situation. Whether you’re looking to save on monthly repayments, consolidate debts, or release equity for home improvements, we’re here to help you navigate the process with clarity and confidence.

Get help from an experienced mortgage broker.

You can speak to one of our specialist mortgage brokers who would be able to guide you through the process. They will advise if there is a lender available and the maximum loan amount based on your circumstances. We are a whole of market mortgage brokerage with access to all lenders. Call us on 01332 470400 or complete the form with your details for us to give you a call back.

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