Fees and costs
On top of your mortgage payments, there are other mortgage-related costs and general moving costs. You may decide to pay for different types of insurance too.
While all the mortgage-related costs will be set out clearly in the 
about this mortgage document that the lender or mortgage broker gives you, there'll be other costs you'll need to budget for. These include stamp duty, estate agency fees and lawyers' fees.
Often you can add certain fees charged by the broker or lender to the mortgage and pay them back over time with your monthly payments. But if you do this, remember that they will cost a lot more in the long run because of the interest. If you want to do this, ask your lender or broker to give you a about this mortgage document on this basis and one without the fees added, so you can compare what you'll pay. Make sure that you take into account the related costs when comparing mortgage deals, as they could vary significantly.
Insurance
You can buy many types of insurance with a mortgage, and your adviser or lender may try to sell you a range of policies. Some types of cover are required as a condition of your loan such as buildings insurance, whilst others are optional and depend on your circumstances. In some cases, mortgage payment protection insurance (PPI) might be a condition of your loan but you don't have to buy it from your lender so shop around for the best deal for you – see Insurance.
Mortgage costs
All mortgage-related fees will be set out in the documents. They may include any of the following:
| Fee or charge | What's it for? | How much? |
|---|---|---|
| Mortgage broker fee (if you use one) | For arranging the mortgage or giving you advice. | This depends on the broker, but if they charge (some don't) they must tell you in the about our mortgage services document. |
| Mortgage booking fee and/or arrangement fee | A fee charged by the lender, usually to reserve your mortgage funds or to cover the administration costs of processing your mortgage. For some lenders, the fee may also be linked to special deals with a lower initial interest-rate. | These vary, and can be significantly higher if linked to a special deal. These large fees can significantly increase the overall cost, particularly if you add the fee to the loan – and so pay interest on it. Use the total cost information in section 5 of the about this mortgage document to find out the overall cost. |
| Mortgage account fee | A single fee charged by the lender when you take out your mortgage to cover set up, maintenance and closing down costs. You won't have to pay a separate exit administration fee when you repay your mortgage. | Typically £100-£300. |
| Valuation fee | The fee a lender charges for a valuation of the property to assess whether it is appropriate security for the mortgage. | This varies from lender to lender, and on the value of the property. |
| Higher lending charge | If you're borrowing a high percentage of the value of the property, the lender may charge a fee to take out insurance cover. This protects them in case you can't pay back your loan and they have to sell your house at a loss. | This will depend on how much you borrow, and how much you're contributing as a deposit. |
| Fee for making your own buildings insurance arrangements | A fee charged by a lender for the administration costs of checking there is sufficient buildings insurance cover if you do not insure your property through the lender. | Typically £25 but may be payable yearly or each time you change insurer. |
| Telegraphic transfer fee | A possible charge from your lender if you need them to transfer the mortgage funds to your solicitor on the same day. | Typically £40-£50. |
| Re-inspection fee | Sometimes a lender will need to re-inspect the property after the original valuation, usually to check if you've made agreed repairs. | Typically £50-£100. |
| Early repayment charge | If you repay all or part of your mortgage earlier than the agreed term. | This may not always apply, but section 10 of the about this mortgage document will give an explanation of when it applies and cash examples. Check the terms and conditions of the mortgage for full details. |
| Fees to repay the mortgage (known as exit administration fees) | A fee to your lender when you repay your mortgage, even if you are not repaying it early. | Typically £75-£300 (plus any early repayment charge, if applicable). |
General moving costs
These won't be listed in the documents.
| Fee or charge | What's it for? | How much? |
|---|---|---|
| Estate agency fee | Marketing and selling your home. | Typically 1-3% of the selling price; ask for a quote and shop around. |
| Stamp duty land tax (known simply as stamp duty) | Tax payable to the government when you buy a home. Make sure this is in your budget if it applies to you - the cost can be high. It is the buyer who pays stamp duty, not the seller. | Varies depending on purchase price of property – see Directgov. |
| Legal fees | Paid to your solicitor to represent you, negotiate for you, and carry out the necessary searches, land registry and so on. This is also known as conveyancing. | This will vary according to the firm. Budget for at least £400 and possibly more. Ask for quotes. |
| Survey fee | Your lender will carry out a valuation visit (see above), but this is only a very basic inspection. You may want a Homebuyers report or a structural survey if you want a detailed report on the condition of the property. | This will vary according to the surveyor, the size of property and the type of report you need. Ask for quotes. |
| Removal costs | Moving all your belongings from your old home to your new one. | Costs will vary, although you can save money by packing up everything yourself. Ask for quotes. |
Top tips
-
Look at your about this mortgage document for fees you must pay.
- Use our checklist so you are aware of the costs involved.
- Shop around for quotes – you can often save money, although make sure you take into account the total costs when comparing deals – not just the repayment costs.
