How Much Does Remortgaging Cost?
Remortgaging can be a smart move — whether you’re looking to lower your monthly payments, release some equity, or find a better interest rate.
But before you dive in, it’s important to understand how much remortgaging really costs and where a remortgaging broker can help you save money and time.
Let’s break it down in simple terms.
What Is Remortgaging?
Remortgaging means switching your existing mortgage to a new one, often with a different lender. Many homeowners do this to:
- Get a lower interest rate once their fixed term ends.
- Access extra funds (called “equity release”) for things like home improvements or debt consolidation.
- Move to a mortgage deal that fits their new financial situation.
While it sounds like a simple process, there are several costs and fees involved — and that’s where a remortgaging broker becomes invaluable.
The Common Costs of Remortgaging
1. Arrangement Fees
Lenders often charge an arrangement or product fee to set up your new mortgage deal. This can range from £500 to £2,000, depending on the type of product. Some lenders let you add this fee to your mortgage balance, but that means paying interest on it over time.
2. Valuation Fees
Before approving a remortgage, the lender may want to check your home’s current value. Many lenders now offer free valuations as part of their deals, but if not, expect to pay £150 to £500 depending on the property’s worth.
3. Solicitor or Legal Fees
Even though you’re not buying or selling property, legal work is still needed to transfer your mortgage. Some remortgage deals come with free legal services, but if not, a solicitor may charge around £300 to £600.
4. Early Repayment Charges (ERCs)
If you’re still within a fixed-rate or discounted period with your current lender, you might have to pay an early repayment fee. This is usually a percentage of your remaining mortgage balance — often between 1% and 5%.
For example, if you owe £150,000 and your ERC is 2%, you’ll need to pay £3,000 to leave your current mortgage early.
5. Exit Fees
Your existing lender might charge a smaller exit or “account closing” fee when you move. This typically costs £75 to £300, depending on the lender.
6. Broker Fees
If you use a remortgaging broker, you may pay a fee for their service. This can range from £300 to £600, or sometimes a small percentage of the mortgage amount. However, many brokers offer fee-free remortgage advice, especially if they earn commission from the lender instead.
Why Using a Remortgaging Broker Can Save You Money
A remortgaging broker is your personal guide through the process. They compare hundreds of deals across different lenders, handle the paperwork, and explain the true costs involved.
Here’s why they’re often worth it:
- Access to exclusive deals: Some of the best remortgage rates are available only through brokers.
- Time savings: They manage all the communication with lenders and solicitors for you.
- Expert advice: A good broker helps you avoid costly mistakes, like triggering early repayment charges or picking a deal that doesn’t suit your goals.
- Clear fee breakdowns: They’ll show you all potential costs upfront, so you know exactly what you’re paying for.
Think of a remortgaging broker as your cost-saving partner — someone who ensures you don’t just find a cheaper mortgage, but also avoid hidden fees that can eat away your savings.
How to Keep Remortgaging Costs Low
- Check if you’re out of your fixed-rate period before switching — this helps you avoid early repayment charges.
- Compare deals across multiple lenders — not just your current one.
- Ask your broker about cashback or fee-free offers — some lenders cover valuation or legal costs to attract customers.
- Avoid adding fees to your mortgage balance — paying them upfront prevents extra interest later.
- Review your long-term goals — sometimes the cheapest monthly payment isn’t the best overall value.
Real Example
Let’s say you have a £200,000 mortgage. You find a new deal through a remortgaging broker that cuts your interest rate from 5.5% to 4.2%.
Even if you pay £1,000 in fees, your annual savings could reach £2,600 or more in reduced interest payments. That’s a big win — and the reason why thousands of homeowners remortgage each year.
Final Thoughts
Remortgaging can be a smart financial move, but only if you understand the costs involved. From lender fees to legal charges, every detail matters.
That’s why working with an experienced remortgaging broker can make all the difference — helping you find the best deal, avoid unnecessary expenses, and move forward with confidence.
When done right, remortgaging isn’t just about saving money — it’s about taking control of your financial future.
