How Much Are Mortgage Fees?

The deposit is the big number everyone focuses on, but a mortgage brings a cluster of smaller fees that together can run from around £1,000 to £3,000 or more. Some are charged by the lender, some by third parties such as surveyors and solicitors, and some, like Stamp Duty, go to the government. Knowing them in advance stops nasty surprises and lets you compare deals properly, because the cheapest headline rate can hide a hefty arrangement fee that wipes out the saving.

The lender’s own fees

The largest lender charge is usually the arrangement fee (also called a product or completion fee), which can be anything from nothing to around £1,999. It’s the price of a particular deal, and there’s a genuine trade-off: a mortgage with a big fee often carries a lower interest rate, while a fee-free deal may charge slightly more each month. Which wins depends on your loan size and how long you’ll hold the deal. On top of this you may see a small booking fee and, sometimes, a valuation fee, though many lenders now provide a basic valuation free. Working these into your overall borrowing plan is essential to a fair comparison.

A basic mortgage valuation is for the lender’s benefit, it simply confirms the property is worth roughly what you’re paying. It is not a survey of the building’s condition. Most buyers commission their own survey separately: a Level 2 homebuyer report typically costs £400–£900, and a full Level 3 building survey more, depending on the property’s age and size. For an older or unusual home, that spend can save you from an expensive surprise later.

The tidiest way to compare deals with different fees is to look at the total cost over the period you’ll actually hold the mortgage, usually the length of the fixed term. Add the arrangement fee to the total of the monthly payments over, say, two or five years, and compare that figure between deals. A mortgage with a £999 fee and a lower rate can beat a fee-free deal on a large loan, yet lose badly on a small one. Lenders publish an APRC (annual percentage rate of charge) to help, but it assumes you keep the mortgage for its full term, which few people do, so your own period-based sum is usually more revealing.

Legal, survey and government costs

Beyond the lender, conveyancing (the legal work of transferring ownership) usually costs £800–£1,800 including searches and disbursements. Then there’s Stamp Duty Land Tax in England and Northern Ireland, a tax on the purchase price with its own thresholds and first-time-buyer relief, which for many buyers is by far the biggest single cost after the deposit. Scotland and Wales levy their own equivalents. Because Stamp Duty depends on price, buyer status and whether you own another property, it deserves its own careful calculation rather than a rule of thumb.

It’s also worth budgeting for the incidental costs that cluster around completion. A CHAPS or telegraphic-transfer fee of £25–£50 covers sending the money; a mortgage account or “deeds release” fee may appear when you eventually redeem the loan; and if you’re buying leasehold there can be notice and registration fees payable to the freeholder’s managing agent. None is large on its own, but together they nudge the total up. Building a simple spreadsheet of every fee, from valuation to Stamp Duty, turns a vague worry into a number you can actually plan around, and makes it obvious when a “cheap” deal is only cheap on the headline rate.

Finally, remember the fees that arrive when a mortgage ends: most fixed deals carry an early repayment charge of 1%–5% if you repay or remortgage before the term is up, plus a modest exit or deeds-release fee. A broker can help you weigh all of these together so you choose on true total cost, not the headline. Vetted Wealth is a free service matching you with independently vetted, FCA-regulated brokers, including advisers across Devon and Cornwall, and you can read more in our mortgages hub. This is information, not personal advice; your home may be repossessed if you don’t keep up repayments.

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