Valuation and legal fees
When you remortgage you will usually have to pay out a few hundred pounds for a property valuation for your new lender and conveyancing fees for making the transfer.
Some mortgage lenders try to lure borrowers from their rivals by covering these costs themselves.
However, the interest rate can be higher on this kind of deal, so it may not be as good as it seems.
You are also likely to face a set-up fee (often called an arrangement or reservation fee) of anything from a couple of hundred pounds to £700 or more.
Again, you may be able to get fee-free deals, but these too come at a price in terms of interest rate.
Adding It All Up
You may find it’s cheaper to pay valuation, solicitor’s and set-up fees to get a lower interest rate.
Or, you may find that once youve taken these and any early redemption penalty on your existing mortgage into account, it’s cheaper to stay put for the time being.
You can’t be sure until you’ve added up all the costs.
If you don’t feel confident about doing this yourself, ask your mortgage broker to do it for you.
And even if you are sure of your calculations, there’s no harm having someone look them over and check you haven’t missed anything.
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