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Mortgage
Guide
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Mortgage
Basics
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What are all these fees for?
Mortgage lenders charge a whole raft of fees. Here's what you need to know
• Set-up fee
Also called an arrangement or reservation fee.
What is it? It's supposed to cover your lender's admin costs, but it's mostly profit.
How much is it? Anything from a couple of hundred to several thousand pounds. Around £600 is typical.
Can I avoid it? Probably not. Fee-free deals do exist, but they often come with a higher interest rate, making them poor value.
• Higher-lending fee
Also called an indemnity guarantee, additional security fee or mortgage advance premium.
What is it? If you borrow a high proportion of your property's value, the lender uses this to pay for insurance to cover it if you can't keep up the repayments. For more on this, read Higher-lending fees explained.
How much is it? Depends on the value of your property and how much you want to borrow. Between £1,200 and £1,500 is typical. For more on this, read How higher-lending fees are worked out.
Can I avoid it? Yes. To find out how, read How to avoid paying a higher-lending fee.
•
Early redemption
penalty
What is it? you'll face
this if you want to get out of a fixed or
discount interest deal before the agreed
date. For more on this, read Early
redemption penalties explained.
How much is it? Could be
several months interest or a percentage
of your loan. Either way, it could cost
you several thousand pounds.
Can I avoid it? Yes. To
find out how, read How
to avoid paying an early redemption penalty.
Also called a deeds, discharge, redemption or sealing fee.
What is it? It's meant to cover the admin costs when you clear your loan, but it's partly profit.
How much is it? From £90 to £295. Around £250 is typical.
Can I avoid it? Unfortunately not, so check the amount at the outset.
To learn more about interest rates, read our sections on
• repayment and interest-only mortgages, and
• variable, fixed and capped interest rates.
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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