How Much Does it Cost to Remortgage?

Reviewed by Neil AinsworthLast updated: November 21, 2025 10:27 am

Image credit: Lina Kavaka @Pexels

What Remortgaging Might Cost You

Remortgaging means replacing your current mortgage with a new deal, either with the same lender (a product transfer) or a different one. This can deliver benefits such as a lower or fixed rate and more flexible terms, but it also carries costs. In 2025, typical two and five-year fixed rates are around 4.3% to 5.5%, depending on your loan-to-value (LTV) and credit profile. These costs are broadly split between charges for leaving your current deal and fees for setting up the new one.

Breakdown of Remortgaging Costs

The decision to remortgage may be driven by a desire to reduce monthly payments, fix for certainty, or release equity. It is essential to understand the full range of costs involved:

• Exit charges: Fees payable on your existing mortgage if you leave during a tie-in period. These often include an Early Repayment Charge (ERC) of around 1% to 5% of the outstanding balance and, in some cases, a mortgage exit administration fee.
• New lender fees: Product/arrangement and valuation fees are common when setting up a new mortgage; some lenders also levy a booking fee on application.

Strategic Considerations for Remortgaging

Timing matters. Many lenders let you secure a new rate 3 to 6 months before your current deal ends, helping you avoid ERCs while protecting against future rate moves. Waiting in the hope that rates fall is speculative; consider whether a rate lock or a shorter fixed term suits your plans. The longer you expect to stay in your home, the more time there is to recoup any upfront costs through lower monthly payments.

It is also wise to consider how your credit score affects the rate offered. A stronger credit profile can unlock better pricing and lower overall borrowing costs.

Additional Costs to Anticipate

Aside from the primary fees, there are other potential costs associated with remortgaging:

1. Legal fees: Remortgage legal work is usually simpler than purchase legal work. Many lenders offer free legals or cashback; if you instruct your own solicitor, budget roughly £200-£400, plus disbursements. Full local searches are often not required, with search indemnity used instead.
2. Penalties: If you leave your new fixed or discounted deal early, an ERC will typically apply. Some lenders also have small charges if a valuation is cancelled or an application is withdrawn.

Understanding these fees and when they apply will help you budget and decide whether remortgaging is the right move. Calculating the break-even point – where savings from the new deal outweigh the costs – is a crucial step.

Costs Associated with Exiting Your Current Mortgage

When you leave your current lender, you may face several fees. The most significant is usually the Early Repayment Charge (ERC), commonly up to 5% of your outstanding balance if you exit during a tie-in period. ERCs typically taper down over time (for example, 5%, then 4%, 3%, 2%, 1% over successive years) and compensate the lender for lost interest.

You may avoid an ERC if your introductory period has ended, or if your lender allows you to lock in a new deal within an early-switch window (often 3 to 6 months before your current deal ends) with completion after your tie-in expires. If you switch lenders before the term ends, you will usually have to pay the ERC. For example, on a £250,000 balance, a 5% ERC would be £12,500.

Another potential fee is a mortgage exit administration fee (sometimes called a deeds release or account closure fee). This typically ranges from £50 to £300 and covers the lender’s administration in closing your account and releasing their charge.

Some lenders also charge a funds transfer (CHAPS) fee when sending redemption monies to your solicitor, usually around £25 to £50.

To minimise these charges, plan your remortgage around any ERC exemption periods and the end of your current deal. Compare the potential savings from a new, lower rate against these costs to ensure that remortgaging provides a net financial benefit over time.

Understanding the Costs of Acquiring a New Mortgage

Taking out a new mortgage also involves various fees. Headline rates can be attractive, but you should consider the overall cost of the deal.

Conveyancing Fees

Conveyancing fees cover the legal work to switch your mortgage to a new lender. Many remortgage deals include free legal work or cashback. If you pay yourself, expect roughly £200 to £400 plus disbursements; full local searches are usually not required for a remortgage, with search indemnity commonly used.

Mortgage Broker Fees

Using a mortgage broker can simplify finding the best deal. Fees vary: some brokers charge nothing and are paid by the lender, while others charge a fixed fee (often £0 to £600) or a percentage (typically 0.3% to 1% of the loan). Ask about their fee and commission structure upfront.

Arrangement and Booking Fees

The product/arrangement fee can range from £0 to £2,000 or more (commonly £999 to £1,499). You can often add this to the loan, though doing so means paying interest on it. A separate booking or application fee of around £99-£250 may apply and is often non-refundable.

Valuation Fees

Lenders charge valuation fees to assess the property’s value, though many offer free valuations on remortgages. Where charged, costs typically range from £250 to £1,500 depending on the property value and lender. Older or unusual properties may need more detailed (and pricier) surveys.

Additional Considerations

Be aware of minor administrative charges. A funds transfer (CHAPS) fee of around £30 to £50 is standard. If you’re considering a fixed-rate mortgage, understand the length of the fixed term, any early repayment charges, and the reversionary rate (such as the lender’s SVR) when the fix ends.

By evaluating all charges associated with setting up the new mortgage, you can budget accurately and ensure remortgaging aligns with your financial goals.

Calculating Your New Mortgage Payments

To estimate your new monthly payments, you need the new interest rate and remaining term. This is crucial to assess whether remortgaging will be beneficial. Many two and five-year fixed rates fall in the 4.5% to 5.5% range, but confirm the specific rate you qualify for with your chosen lender.

Steps to Calculate Your New Mortgage Payments

Calculating your potential monthly payments after remortgaging involves a few key steps:

1. Identify the interest rate: Confirm the exact rate offered by the new lender. Pricing varies by LTV, credit profile and market conditions.
2. Determine the loan amount: Use the remaining balance of your current mortgage. Decide whether to add any product fees to the loan or pay them upfront.
3. Loan term: Decide the repayment term for the new mortgage, which may differ from your current deal.
4. Use an online calculator: Enter these figures into a mortgage calculator to estimate your monthly payment.

By understanding these elements, you can forecast your monthly costs and judge whether the switch makes economic sense.

Example Calculation

For example, if you have an outstanding balance of £200,000 at a new fixed rate of 5% over 20 years, your monthly repayment would be approximately:

• About £1,320 per month for a capital-and-interest repayment mortgage.

This simplified example excludes any fees added to the loan and assumes no changes to terms and conditions. Always use the most accurate figures available when budgeting.

Compare these new payments with your current commitments and factor in upfront costs, such as legal and valuation fees, as well as any ERCs, which could offset initial savings.

Consider speaking to a qualified mortgage adviser for personalised guidance.

Timeline and Tips for Remortgaging

The remortgaging process generally takes four to eight weeks, depending on the complexity of your case and the efficiency of all parties. To keep things moving, have proof of income, ID and any required property documentation ready.

Staying with your current lender can be convenient if they offer a competitive product transfer; this often reduces legal work and costs. Alternatively, shopping around may secure a lower rate or better features.

Utilising a Mortgage Broker

Employing a mortgage broker can streamline the remortgaging process. These professionals can offer access to a broader array of lenders and some exclusive deals not directly available to the public. Mortgage brokers are handy for navigating complex credit situations or for finding specialised lending products. Their expertise can be invaluable for effectively comparing the market, ensuring you secure the best possible deal tailored to your financial situation.

Key Tips for Efficient Remortgaging

1. Assess your financial goals: Be clear whether you want to lower monthly payments, reduce the term, fix for certainty or consolidate debts.
2. Check your credit score: A stronger credit file can substantially improve your chances of securing lower rates. Make sure your report is accurate and up to date before applying.
3. Consider the timing: Aim to start 3 to 6 months before your current deal ends to avoid ERCs. Ask your existing lender for a product transfer quote and compare it with whole-of-market alternatives.
4. Prepare for valuation: Ensure your property is well presented before the valuation, as this can affect the loan amount and terms offered by the lender.

By following these tips and considering both your current lender’s offers and the potential benefits of switching to a new lender, you can make a well-informed decision that aligns with your long-term financial goals. Remember, each remortgaging scenario is unique, and what works for one homeowner may not be the best choice for another. Always consider personalised advice from financial experts or mortgage brokers when remortgaging your property.

Get Expert Mortgage Advice

While remortgaging can deliver meaningful savings, the fees and tie-ins make it essential to understand the full implications before proceeding. A qualified, FCA-authorised mortgage adviser can provide tailored recommendations and help you compare the true cost of different deals.

At FinancialAdvisers.co.uk, we specialise in connecting homeowners with FCA-approved mortgage advisers who can offer expert advice tailored to your needs and financial circumstances. Whether you’re considering remortgaging or need guidance on other financial matters, our network of seasoned advisers is here to assist you.