Remortgaging costs money, and before applying for a new deal you should find out just how expensive it is going to be. Common costs are:
- Deeds release fee and sealing charge on existing mortgage.
- Arrangement and administration fees for the new mortgage. Mortgage arrangement fees can vary from £150 up to £1,500
- A mortgage valuation fee, which tends to be between £130 and £300, depending on your chosen lender and the value of your property.
- Any early redemption penalty on the existing mortgage. This can be from three to six months’ additional interest payments if you redeem the mortgage within a certain period of time after taking it out.
- The mortgage indemnity premium. If the amount you are borrowing is more than 75% of the property’s value (loan to value or LTV) you may have to pay a one-off mortgage indemnity guarantee (MIG) premium on the new mortgage.
- Solicitors’ fees – unless your new lender offers free legal work
- Land Registry and local search fees
- If you have negative equity in your property, you will have to find the additional money that you owe on your old mortgage when you take out a new one. If this is the case, don’t remortgage unless you really have to.
Information source: 'What mortgage' publication