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Mortgage Guide
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Types Of
Mortgage
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UK Lenders that don't apply a higher-lending charge
Around
two-thirds of mortgage
lenders apply a higher-lending
charge (HLC) also known as mortgage indemnity
insurance, a mortgage indemnity guarantee
(MIG), additional security fee or mortgage
advance premium if you want to borrow 90 per cent
or more of your property's value.
For more about this, read What is mortgage indemnity insurance?
The amount will vary between lenders, but as a rule of thumb, you can expect to pay around £1,500 for every £100,000 you borrow.
So for a £150,000 mortgage, it could work out at £2,250.
For a full explanation of how these charges are calculated, go to How higher-lending fees are worked out.
Clearly, this is an additional cost you will want to avoid especially since only the lender benefits from it.
The easiest way to achieve this is to look at the deals on offer from lenders that don't apply HLCs.
An independent financial adviser or mortgage broker will be able to source these for you.
These lenders do tend to compensate for missing out on lucrative HLCs by charging slightly higher interest rates on mortgages above 90 per cent of property value.
Even so, their best deals should still work out substantially cheaper than comparable ones available from lenders that do apply HLCs.
But before committing yourself, always do your sums to check this is the case.
Alternatively, if you prefer what's on offer from an HLC lender, borrow a few pounds below its charging threshold and make up the shortfall from elsewhere.
For more on how to achieve this, visit How to avoid paying a higher-lending fee.
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
Open / General Costs of Getting a Mortgage
Hidden / True Costs of Home Buying and Mortgages
Mortgage Costs That Can arise during the mortgage term
Mortgage Costs - Final Payments / 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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