Remortgaging typically costs somewhere between nothing at all and a few thousand pounds, depending on your lender, your circumstances and whether you use a broker. The main costs to budget for are a potential early repayment charge on your existing deal, a product or arrangement fee on the new one, and sometimes valuation or legal fees, though many remortgage deals now come fee-free. The honest answer is that the cheapest-looking rate is not always the cheapest overall deal, once you add up every cost involved.
The costs that can apply when you remortgage
Not every remortgage involves every one of these costs. Some lenders waive several of them to win your business. But it is worth understanding what each one is, so nothing catches you out partway through.
Early repayment charge (ERC)
If you are still inside a fixed or discounted deal with your current lender, leaving before the end of that period usually triggers an early repayment charge. This is typically charged as a percentage of the outstanding mortgage balance, and it often reduces the closer you get to the end of your current deal (for example, a charge might step down year on year across a five-year fix). This is usually the single largest cost of remortgaging early, and for many homeowners it is the deciding factor in whether to switch now or wait.
If your current deal has already ended and you have moved onto your lender's standard variable rate, there is normally no ERC to worry about, which is one reason so many people remortgage at that point.
Product or arrangement fee
Many new mortgage deals carry a product fee, sometimes called an arrangement fee, charged by the new lender for setting up the mortgage. This can often be added to the loan rather than paid upfront, though doing so means you pay interest on it for the life of the mortgage, so it is not automatically free money. Increasingly, lenders also offer fee-free versions of their products, usually at a very slightly higher interest rate. Which option works out cheaper depends on your loan size and how long you plan to keep the deal, which is exactly the kind of sum a decent broker should run for you before you commit.
Valuation fee
The new lender will need to value your property to confirm it supports the loan you are asking for. Many lenders include this as a free valuation as part of their remortgage package. Where it is charged separately, it is usually a modest, one-off cost rather than a major budgeting concern.
Legal or conveyancing fee
A straightforward remortgage with no change of borrower usually needs far less legal work than a house purchase, and many lenders offer free legal work for remortgages as part of the deal, using their own panel solicitor. If you want to use your own solicitor instead, or your situation is more complex (for example, you are adding or removing someone from the mortgage), you may need to pay a legal fee directly.
Mortgage broker fee
Some brokers charge a fee for arranging your remortgage, others are paid entirely by commission from the lender, and some use a combination of the two. This varies by firm and by the type of case, so it is a fair question to ask upfront, and a transparent broker will tell you clearly before any work begins. At The Mortgage Experts, we are always upfront about how we are paid before you commit to anything.
Exit or administration fee
A smaller cost, but worth knowing about: some lenders charge a modest exit or administration fee simply for closing your existing mortgage account, separate from any early repayment charge. It is usually a fixed, relatively small amount set out in your original mortgage offer.
Why the cheapest rate is not always the cheapest deal
It is tempting to simply compare interest rates and pick the lowest one. In practice, a deal with a slightly higher rate but no product fee can easily work out cheaper overall than a lower rate with a sizeable fee attached, especially on smaller mortgage balances or shorter deal periods. This is why the true cost of remortgaging has to be assessed as a whole package: rate, fee, and any ERC on your current deal, added together and compared properly against the alternative of staying where you are.
This is also why "free" isn't always better than "fee". A fee-free deal at a higher rate might cost more over two years than a deal with a fee attached at a lower rate, particularly on a larger loan. There is no shortcut here other than actually running the numbers for your specific mortgage balance and timeframe.
When remortgaging costs you nothing worth worrying about
If your current deal has ended, you choose a fee-free product with a free valuation and free legal work, and you do not need any extra borrowing, it is entirely possible to remortgage without paying anything directly out of pocket. This is a genuinely common outcome, not a rare exception, which is part of why it is worth reviewing your mortgage as your current deal approaches its end rather than drifting onto a standard variable rate by default.
How to work out your own likely cost
The only reliable way to know what your remortgage will actually cost is to look at your specific situation:
- Check your current mortgage offer or annual statement for any early repayment charge and when it reduces or ends.
- Note how much you still owe and how much your property is roughly worth.
- Decide whether you need to borrow more while remortgaging, for home improvements or any other purpose.
- Compare whole deals, rate plus fee plus any charge for leaving early, rather than rate alone.
A broker can do this comparison for you properly, across the market, rather than you trying to compare dozens of products by hand.
How The Mortgage Experts can help
At The Mortgage Experts, we talk homeowners through the real cost of remortgaging before recommending anything, including whether it is actually worth moving at all right now. Sometimes the honest advice is to wait a few months until an early repayment charge drops away or ends. We would rather tell you that than rush you into a deal that does not serve you.
Frequently asked questions
Is it cheaper to remortgage with my existing lender or switch to a new one? Staying with your existing lender (sometimes called a product transfer) is often quicker and can involve fewer costs, such as no new valuation or legal work. However, your existing lender's rates are not always the most competitive on the market, so it is worth comparing both routes before deciding, rather than assuming either one is automatically cheaper.
Can I remortgage without paying an early repayment charge? Yes, if you wait until your current deal has ended, or if your deal never had one (some variable rate mortgages do not). If you are still within a fixed or discounted period, check your offer document for the exact charge and when it reduces, since timing your switch carefully can save you a meaningful amount.
Does remortgaging always involve a credit check? Yes, a new lender will carry out a credit check and affordability assessment as part of any remortgage application, in the same way as any new mortgage. This is separate from the various fees discussed above and is not itself a cost, but it is worth being aware of if your circumstances or credit position have changed since you last took out a mortgage.
If you would like a clear, no-pressure breakdown of what remortgaging would actually cost in your situation, get in touch with The Mortgage Experts and we will talk you through the real numbers before you decide anything.