How Much Will Remortgaging Cost? A Complete Breakdown for UK Homeowners
Remortgaging can save you thousands of pounds in interest over time—but it isn’t entirely free. Many homeowners are surprised to discover hidden fees or unexpected charges during the remortgage process. Knowing the full cost ahead of time ensures you can compare offers effectively and make the smartest financial choice.
This detailed UK guide breaks down every cost you may encounter, compares lender policies, and shows when remortgaging is truly worth it.
What Are the Main Costs Involved in Remortgaging?
While some remortgage deals are advertised as “fee-free,” they still carry potential charges. Here’s a breakdown of the most common remortgaging costs:
| Cost Type | Estimated Range | Description |
|---|---|---|
| Arrangement/Product Fee | £0 – £1,500+ | A charge for setting up the new mortgage deal |
| Valuation Fee | £0 – £500 | A property assessment by the new lender |
| Legal Fees | £0 – £500+ | Solicitor or conveyancer costs to handle the transaction |
| Early Repayment Charge | 1% – 5% of mortgage | Penalty for leaving your current deal early |
| Exit Fee (Deeds/Admin) | £50 – £300 | Charged by current lender for account closure |
| Broker Fee (if applicable) | £0 – £500 | Charged by some independent mortgage brokers |
Let’s now explore each of these in more detail.
What Is an Arrangement or Product Fee?
Most UK lenders charge a fee for accessing their best interest rates. This is known as a product fee or arrangement fee.
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You can often add it to your mortgage balance, but this means paying interest on it
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Some lenders offer fee-free deals, but the interest rate might be slightly higher
Example:
Barclays may offer a 4.39% fixed deal with a £999 fee, or a 4.59% option with no fee. Depending on your mortgage size, it could be cheaper to pay the fee for a lower rate.
Tip: Calculate both options over the fixed term to see which results in lower total payments.
Do You Have to Pay for a Valuation?
Valuation is how the lender confirms the current market value of your home.
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Many UK lenders waive this fee for remortgages as an incentive
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Others may include it in a package deal or charge separately, especially for high-value homes
Example:
HSBC often provides free valuations on remortgage deals, while other lenders like Halifax may charge for bespoke property types.
Are Legal Fees Always Required?
Yes—but not always paid by you.
When remortgaging, legal work is needed to update land registry records and coordinate the switch between lenders.
There are three ways this might work:
| Option | Who Pays? |
|---|---|
| Free legals included | Lender pays solicitor |
| Cashback deal (£200–£500) | You choose your own solicitor and use cashback to cover cost |
| No offer | You pay full legal fees, usually £300–£500 |
Example:
Nationwide and Virgin Money both offer free legals on many remortgage products, but you may prefer cashback if you want to use your own solicitor.
What Is an Early Repayment Charge (ERC)?
An ERC is a penalty fee charged by your existing lender if you exit your mortgage deal early.
Typical ERCs are:
| Year of Fixed Term | ERC Rate (Typical) |
|---|---|
| Year 1 | 5% |
| Year 2 | 4% |
| Year 3 | 3% |
| Year 4 | 2% |
| Year 5 | 1% |
Example:
If you owe £180,000 and your ERC is 3%, the fee would be £5,400.
That could wipe out savings from switching early unless rates have dropped dramatically.
Always check your mortgage paperwork for exact figures before making a move.
What Is a Mortgage Exit Fee?
Sometimes called a deeds release fee, this is a small charge applied by your existing lender when the mortgage is repaid and closed.
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Usually between £50 and £300
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Often deducted automatically from the final balance
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Applies even if your mortgage term ends naturally
You can find this fee in the original Key Facts Illustration (KFI) provided at the start of your mortgage.
Are Broker Fees Worth Paying?
Some brokers charge fees for arranging a remortgage. Many others are fee-free, receiving commission directly from lenders instead.
You might pay a broker fee if:
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You have bad credit or complex circumstances
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You need access to niche or exclusive deals
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You’re self-employed and want guidance on affordability
Tip: Always ask upfront if a broker charges a fee and what that covers.
Are There Any Hidden or Unusual Costs?
Some lesser-known charges may appear depending on your lender or mortgage situation:
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Porting shortfall penalty (if you’re porting part of a mortgage)
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Telegraphic transfer fee (around £25–£40 for transferring funds)
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Second property searches if borrowing more or changing legal ownership
These are rare in standard remortgages, but your solicitor or broker should flag them if relevant.
Comparing Remortgage Cost Packages from UK Banks
Here’s how a few major UK lenders structure their remortgage fees:
| Lender | Legal Fees | Valuation Fee | Arrangement Fee | Extras |
|---|---|---|---|---|
| Halifax | Free | Free | £0–£999 | Cashback on some deals |
| NatWest | Free | Free | £0–£995 | Remortgage tracker tool |
| HSBC | Free | Free | £0–£999 | Flexible rate options |
| Santander | Free or Cashback | Free | £0–£1,000 | Online-only exclusive deals |
| Virgin Money | Free | Free | £0–£1,295 | Cashback up to £1,000 |
Always compare total cost over the fixed period—not just interest rates.
How to Avoid Paying More Than You Need To
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Time your remortgage properly – Start 3–6 months before your fixed deal ends to avoid ERCs
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Look for cashback or free legals – These can offset legal costs
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Compare total cost, not just rates – Add fees to your calculations
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Avoid adding fees to the loan – If possible, pay arrangement fees upfront
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Use a fee-free broker – They can help you find deals that don’t carry added charges
Is Remortgaging Still Worth It After Fees?
Absolutely—if the savings outweigh the costs.
Example:
| Scenario | Current Deal | New Deal |
|---|---|---|
| Rate | 6.49% (SVR) | 4.29% (2-year fix) |
| Mortgage Amount | £200,000 | £200,000 |
| Monthly Payment | ~£1,360 | ~£1,080 |
| Annual Saving | ~£3,360 | — |
| Fees Involved | £1,200 | (Product + Legal) |
| Total Saving Over 2 Years | ~£5,520 | (Even after fees) |
Even with £1,200 in fees, this borrower saves over £5,000 by remortgaging.
Final Thoughts: Calculate, Compare, and Be Prepared
Remortgaging can unlock huge financial savings—but it’s crucial to understand the full cost involved. From arrangement fees to legal charges, what looks like a bargain could become expensive without proper analysis.
Always:
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Check for ERCs before exiting your current deal
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Compare both rate and total fees when looking at new deals
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Use a reliable broker or calculator to weigh options
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Consider a deal with cashback or free services where possible
If you’re ready to explore your options, try the MoneyHelper mortgage calculator to work out potential savings and costs.