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Charges during a mortgage

When you’re comparing mortgages, it’s essential to consider the fees as well as the interest rate.

Most people are at least vaguely aware they will face a set-up charge at the beginning of their loan term and some kind of exit fee at the end.

(For more on these, read Charges at the start of a mortgage and What’s happening to mortgage exit fees?)

What would-be borrowers tend to be less aware of is the huge range of fees mortgage lenders can clobber them with during their mortgage term.

As a general rule, they will apply these whenever you do anything that causes them extra work – however slight.

So here’s what you need to know




What can my lender charge me for?

The short answer is ‘just about anything’. But these fees fall into three broad categories


Fees for making a change

You are likely to be charged an admin fee every time you put your lender to any trouble.

For something small, like asking for a copy of your title documents, you might pay up to £75.

If you want to make a significant change such as adding or removing someone’s name from the mortgage, or changing from an interest-only to a repayment loan, expect to be charged several hundred pounds.


Fees for missing a payment

If you fail to make your monthly payment on time, some lenders will give you a few weeks’ grace.

But an increasing number will be ready to penalise you.

You might be charged around £30 for a returned cheque or direct debit, with a similar fee every time they phone or write to you about your arrears – although this can be as much as £50 a time.

Penalties like these can soon mount up, so if you think you might have trouble keeping up with your repayments, contact your lender right away.

If you’ve had a good payment record so far, it may agree to waive the charges.

For more information, go to What if I get into financial difficulties?


Fees to get out early

Virtually all lenders apply an early redemption charge if you want to get out of a deal during the initial discounted or fixed-rate period.

This could be £7,500 or more on a £150,000 loan.

To find out more about these, see Early redemption penalties explained and How to avoid paying an early redemption penalty.


 

To read more on this subject please see the list below or your mortgage guide or your home buying guide

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Read On

The Costs of a Mortgage in the UK

The problem

The truth about mortgage fees

General costs of getting a mortgage

Hidden / True costs of home buying and mortgages

Charges at the start of a mortgage

Charges during 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

Costs of a UK Mortgage

Your Mortgage TOP TIPS

Calculators

A to Z all UK Mortgage Types

 

Read On

Guide to Buying a Home in the UK

Guide to UK Home and Mortgage Insurance

Life Insurance Guide

Glossary of UK Mortgage Terms

Mortgage News

 


 


 

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