Remortgage fees explained

Remortgaging is not just about the interest rate. Fees can be the difference between a genuinely cheaper deal and a deal that only looks good on paper.

Use break-even calculator Estimate monthly payment How to compare deals

Quick answer: what fees should you expect?

Many remortgages have at least one fee, but the mix varies by lender and product. In practice, you are usually looking at:

Product fee (arrangement fee): often £0 to £1,999+
Broker fee: commonly £0 to £995+ (if using a broker)
Valuation fee: sometimes free, sometimes a few hundred pounds
Legal fees: sometimes “free legals”, otherwise payable
ERC: only if you are leaving your current deal early

What each remortgage fee actually means

1) Product fee (arrangement fee)

This is the charge to take out the mortgage product. It is often the biggest single fee. Lenders sometimes offer: a lower rate with a higher fee, or a higher rate with no fee.

If you plan to switch again in 2 to 3 years, a high fee can be hard to justify unless the rate difference is meaningful. Use the break-even calculator to compare properly.

2) Broker fee

Some brokers charge a fee, others do not. A fee can still be worth it if it saves you time, finds a better-fit deal, or reduces the risk of applying for the wrong product.

If you do pay a broker fee, treat it like any other switching cost and include it in break-even.

3) Valuation fee

The lender may need to confirm the property value. Sometimes this is free, especially at lower LTV, but it can be payable. Your valuation also affects your LTV band, which can change available deals.

4) Legal fees

Remortgaging involves legal work to switch the lender’s charge on the property. Many deals include “free legals”. If not, you may pay a solicitor. Either way, include any known cost in your comparison.

5) Early repayment charges (ERC)

ERC is the fee to exit your current mortgage deal early. It can be the biggest blocker to switching. If you are close to the end of your fixed period, it is often worth checking whether waiting avoids the ERC entirely. See ERCs explained.

The simplest way to compare deals

Comparing deals properly does not need a spreadsheet. Follow this method:

Estimate your new monthly payment using the payment calculator.
Work out your monthly saving vs your current payment.
Add up one-off costs: product fee, broker fee, valuation, legal, and any ERC.
Run the break-even calculator to see how long it takes for savings to cover fees.
Choose a deal that fits how long you expect to keep it, not just today’s payment.

Pitfalls to avoid

Comparing rate only: a lower rate can still cost more if the fee is large.
Ignoring ERC: switching early can wipe out savings for years.
Not matching your time horizon: if you will switch again soon, fees matter more.
Adding fees to the loan without thinking: it reduces upfront cost but can increase total interest.

Checklist: what to gather before comparing

Your current mortgage balance and remaining term
Your current monthly payment
Estimated property value (for LTV)
Any ERC and when it ends
Fees on the new product (and whether they can be added to the loan)

FAQs

Common costs include a product (arrangement) fee, broker fee (if used), valuation fee, legal fees, and sometimes an early repayment charge (ERC) to leave your current deal.

Not always. A deal with a low rate but a large product fee can cost more overall, especially if you plan to switch again in a couple of years.

Often yes, but you may pay interest on it over time. It can reduce upfront cash needed, but can increase the true cost of the deal.

Compare the total cost over the period you expect to keep the deal: monthly payments plus fees and any ERC. A break-even calculation makes this quick.