There are various fees that you may have to pay to leave your current mortgage provider and move to another.
Fees payable to your existing lender include:
- an Exit Fee/Redemption Fee which is essentially an administration fee for closing down the mortgage and redeeming the charge. This is payable to your existing lender.
- You may also be subject to an Early Repayment Charge if you are still within the initial fixed term of your deal. These vary depending on the lender and how long is left on your fixed term but are usually charges as a percentage of the outstanding loan.
There will also be fees in arranging the new mortgage which can include:
- an Arrangement Fee/Product Fee which is typically between £1,000 and £1,500 and can either be paid upfront or added to the loan.
- Your lender may also charge a Valuation Fee
You will also be liable to pay legal fees for the conveyancer or solicitors firm dealing with the legal aspects of the remortgage. Many lenders offer package deals which will include free valuation and/or legal fees to complete the conveyancing.
If you use a mortgage adviser or mortgage broker then they may charge a fee for their services.
It is important to consider whether these extra costs will outweigh the savings that you will make in the long run.
You can avoid some of these fees by switching products but staying with your existing lender. It is worth calculating whether the savings made by moving to a new lender outweigh the costs that will be incurred and compare this to the savings you could make on a new deal with your existing lender.
