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Mortgage
Guide
Click for Full Contents
The Costs of a Mortgage in the UK
Hidden / True Costs of Home Buying and Mortgages
When working out the true cost of your mortgage these hidden charges are less obvious. They may apply when you choose to take your buildings insurance with a company other than your mortgage provider, or when you change your mortgage whilst remaining with the same provider. These are things you really might not expect to have to pay for, but some lenders charge all of these.
-
Mortgage
Indemnity Guarantees
-
Buildings
Insurance Switching or Other Provider Fee
-
Remortgage
Administration / Switching Fee
(remortgaging only)
- Other Costs to Bear in mind
Watch out for Mortgage indemnity guarantees
These are another way of getting even more money from mortgage borrowers and home buyers. They are of no benefit to you but are solely to cover the lender in case you have problems repaying the mortgage.
Costs vary dramatically, but you can expect to pay roughly £1,500 per £100,000 of purchase price.
So the MIG for a £150,000 property might be £2,250.
Read more about Mortgage Indemnity Insurance
Insurance
All mortgage lenders will insist on your having buildings insurance in case there's a fire etc, to protect their interest - don't forget they in effect own "your" home until you have paid off the mortgage.
As part of your mortgage deal they will offer you a ready made insurance policy they have, which is usually includes contents insurance - ie for your posessions, which is always a good idea to have.
You
will also need mortgage
payment protection insurance ie in case of illness etc
to insure your regular mortgage payments are paid.
The golden rule is never automatically get your home
and mortgage insurance from your mortgage lender. They make
big money on overcharging for buildings and
contents cover.You can very likely get the same insurance
for less elsewhere.
It is not actually illegal for your lender to insist that you take out their insurance policy as part of your mortgage. This is called insurance tying in. Thankfully it is becoming less common mainly owing to greater consumer awareness of good insurance deals available online.
If you get your insurance from another, cheaper provider, don’t be surprised if your lender adds a little ‘admin fee’ by way of punishment. This can be around £35 but will depend on the lender.
Other Real Costs to Bear in mind
Unfortunately,
even after everything has been signed and sealed there are still
costs to consider, mainly concerning your move and new property...
Renovations, repairs, decorating, carpets, furniture, appliances
etc.
Read more about
other costs involved in buying a home.
To read more on this subject please see the list below or your mortgage guide or your home buying guide
Read enough? Just want a quote? To get your best mortgage quote quickly and easily we can put you in contact with a recommended mortgage adviser. It's free, completely confidential and there's no obligation at all. Simply fill out the form below
Read On
The Costs of a Mortgage in the UK
General costs of getting a mortgage
Hidden / True costs of home buying and mortgages
Charges at the start of a mortgage
Arrears Fees / Costs of falling behind payments
Fees for changing your mortgage
Final Payments / Mortgage Exit Fees
Why The Mortgage Lenders are So Greedy
Read On / Mortgage Guide
How
to Choose your Mortgage
Types of Mortgage
Remortgages
Where to Find Your Mortgage
Getting a Mortgage in Principle
Read On
Guide to Buying a Home in the UK
Guide to UK Home and Mortgage Insurance
Browse over 200 Free Mortgage TipsYour Complete Guide to UK Mortgages Find Out How to Win the Race to Buy Your Home - Home Buyers Guide Learn How to Save ££s by Remortgaging Read the Insider Info on Home Insurance Site Help |
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