Is It Free to Remortgage?

When you’re shopping around for remortgages, you’ll see a whole host of different types of offer, and it can become easy to lose track of what the costs will be.

There are lenders who advertise ‘fee free’ remortgages, however bear in mind that they may offer less than favourable rates, in which case any savings you’ve made on fees will be quickly cancelled out by the cost of your remortgage payments.

Costs

There are a number of costs that are often associated with remortgaging.

When you take out a remortgage, you are effectively securing a new mortgage with your property, paying off the existing mortgage with the funds from this and being left just with the new mortgage.

Your current mortgage deal may involve exit fees that are payable if you end the mortgage early, which is what may be happening when you pay it off with the new mortgage. Be sure to check this out in the terms of your current deal and factor the cost into your remortgage calculations.

Additionally, there may be set up costs involved in your new mortgage deal being carried forward. Arrangement fees and legal fees as well as valuation costs are often charged, all of which can come to substantial amounts. Again, make sure you know what these fees are going to be so that you don’t end up with a nasty shock from an unexpected bill.

Which of these set up costs will be charged depends on the lender and the deal they’re offering. For example, it is up to them if they actually want to carry out a valuation on your property, although in many cases they do indeed do this.

There are legal processes and procedures that are necessarily gone through in order for a remortgage to be seen as acceptable within UK law. These are inevitably both time consuming and often costly.

Lender

If your remortgage is with the same lender as your current mortgage, you may find that at least some of these fees are not charged, since you are already a customer of theirs and your property is already on their records etc. However, if you are changing lender you are more likely to incur the various set up costs.

Be sure to bear in mind any costs when calculating the value of a remortgage offer, as some of your savings may end up being eaten up by the additional charges involved.