How much should you expect to pay in mortgage fees?

Mortgage fees: what to expect and when

When you take out a mortgage, the cost isn’t just the interest rate. Lenders and third parties may charge fees at different stages—during application, at completion, and sometimes later if you repay early or close the mortgage.

This guide explains common mortgage fees, what they’re for, and the points in the process when they may apply.

Fees to expect during the mortgage application

1) Arrangement / product fee

An arrangement (or product) fee is charged by the lender for setting up the mortgage. It may be:

• a flat fee, or
• a percentage of the loan (depending on the mortgage type).

Some mortgages advertise a £0 product fee, but these deals may have other pricing differences (for example, a higher interest rate). In some cases, the fee can be added to the mortgage—this increases the amount you borrow and the interest you pay over time.

2) Booking fee

A booking fee is sometimes charged when you formally book the mortgage offer. Not every lender charges this, and it may be rolled into other fees on certain products.

3) Valuation fees

Lenders usually require a valuation to confirm the property is suitable security for the loan. Valuation charges can vary depending on the property and the lender’s process.

Some deals may include a valuation fee waiver, but it’s still worth checking whether valuation costs are payable and what type of valuation is being used.

4) Telegraphic transfer fee

When mortgage funds are sent to the solicitor to complete the purchase, some lenders charge a small administration fee for the transfer.

5) Mortgage account fee

An account fee may be charged for setting up and maintaining the mortgage account, and sometimes for closing it at the end of the term.

Costs that may be applicable depending on your circumstances

These aren’t always charged for every mortgage, but they’re worth understanding because they can affect the overall cost.

Homebuyer surveys

A lender’s valuation is not the same as a survey. If you want more detailed information about the property’s condition, you may choose a homebuyer survey (or a more comprehensive building survey). The cost depends on the level of inspection and the property.

Higher lending charge

If you’re borrowing a higher proportion of the property value (often linked to lower deposit scenarios), some lenders may apply a higher lending charge.

Freedom of agency fee

Some lenders may require you to arrange buildings insurance through them, or may charge an administration fee if you choose to place insurance elsewhere.

Additional insurance

Most lenders require buildings insurance. Some borrowers also consider optional protection products (such as life insurance or critical illness cover). These aren’t mortgage fees, but they can be part of the overall cost of buying and protecting the property.

Broker fees

If you use a mortgage broker, there may be a broker fee. This can be structured in different ways (for example, a fixed fee or a fee based on the loan amount). The key is to understand how the fee is calculated and whether it’s separate from lender charges.

Fees you may encounter after you’ve secured the mortgage

Some mortgage costs only become relevant later—particularly if you change your plans.

Early repayment charges (ERCs)

If you repay your mortgage (or a portion of it) early—such as during a fixed-rate period—some lenders charge early repayment charges. The amount and how it’s calculated depends on the lender and the mortgage terms.

Exit fees

When you close your mortgage account after repayment, lenders may charge an administration fee.

Deeds release / sealing fees

After the mortgage is repaid, lenders may charge a fee to release the property’s title deeds (or to handle the legal process of sealing/releasing them, depending on the lender’s procedure).

Redemption administration fees

Some lenders charge an administration fee when processing the full repayment of the mortgage.

Other costs to budget for alongside mortgage fees

Mortgage fees are only one part of the overall buying cost. You may also need to consider:

Legal fees

A solicitor or conveyancer is required to manage the legal work for the purchase. Fees vary depending on the complexity of the transaction.

Stamp duty

Stamp duty is a government tax based on the property value and the purpose of the purchase. The exact amount depends on your circumstances.

Removal and moving costs

Moving costs vary significantly, but it’s common to budget for removals, packing, and any storage if needed.

How to compare mortgages when fees vary

Two mortgages can have the same interest rate but very different upfront and ongoing costs. When comparing options, it helps to look at the overall cost, not just the monthly payment.

Consider whether a mortgage has:

• a product/arrangement fee (and whether it’s payable upfront or added to the loan)
• booking and valuation charges
• ongoing account fees
• potential ERCs if you might repay early
• any lender-specific admin fees at completion or redemption

A broker can help you understand the total cost profile of different deals by bringing together lender fees, product pricing, and any relevant charges that may apply to your situation.

Key takeaway

Mortgage fees can be spread across the process—application, completion, and sometimes later if you repay early or close the mortgage. Checking which fees apply to the specific mortgage product you’re considering is the best way to budget accurately and avoid surprises.