Mortgage costs

When you’re planning a home purchase, the mortgage itself is only part of the picture. Alongside your deposit, there are often lender fees, valuation and survey costs, legal and conveyancing charges, and day-to-day moving expenses. If you don’t account for these items early, it’s easy for your budget to get squeezed.

This guide sets out the main mortgage-related costs buyers commonly face, explains what they cover, and highlights where costs can vary.

Related guides:

• Mortgage valuation fees
• Conveyancing fees
• Early repayment charges and the cost of remortgaging
• Stamp Duty when buying a home

What are the typical mortgage costs?

Mortgage costs usually fall into a few categories: fees charged by the lender, costs linked to assessing the property, legal and administration charges, and practical costs connected with moving.

Mortgage booking, arrangement and account fees

These are the charges associated with securing and setting up the mortgage.

Valuation and survey costs

Lenders require a valuation to confirm the property’s value for lending purposes. Buyers may also choose a survey to understand the property’s condition.

Legal and conveyancing fees

A solicitor or conveyancer handles the legal work needed to transfer ownership and manage mortgage-related requirements.

Insurance and mortgage-related protection

Mortgage lenders typically require buildings insurance. Contents insurance is often optional, but many buyers choose it to protect belongings.

Moving and settling-in costs

Even when the mortgage completes smoothly, there are practical costs that can catch buyers out.

Further fees you may encounter

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

• 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.
• 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.
• 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.
• 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.

For more on how the proportion you borrow is calculated, see loan-to-value (LTV) explained.

Stamp Duty Land Tax (SDLT)

Stamp Duty Land Tax is a tax paid when you buy a property in England and Northern Ireland. The amount depends on the purchase price and whether you’re a first-time buyer.

Key points to understand:

• SDLT is generally paid to your solicitor, who submits it to HM Revenue and Customs on completion
• the rates are applied to portions of the purchase price
• first-time buyer relief may apply in England, depending on eligibility

Typical amount: varies significantly based on purchase price and buyer status

Remortgage and porting: additional costs to plan for

If you’re remortgaging (switching your mortgage deal) or porting (moving your existing mortgage to a new property), there can be extra charges depending on your current lender and the new arrangement.

Remortgage fees

Remortgaging can involve lender fees and exit costs from your current deal.

• Early repayment charges (ERCs): If you leave your current mortgage before the end of a fixed period, ERCs may apply.
• Exit fees: Some lenders charge an amount for closing the mortgage.
• New lender fees: The new mortgage may include booking, arrangement and valuation-related costs.

Porting a mortgage

Porting lets you move your existing mortgage product to a new property, subject to lender rules.

• Lender-dependent: Whether porting is available and what fees apply depends on your lender and your current mortgage terms.
• Property and affordability checks: Even when porting, the new property and your circumstances may still need assessment.

Ongoing mortgage costs: ERCs, SVR drift, and product transfer fees

Hidden costs aren’t only upfront. Some of the most significant charges can appear later.

Standard Variable Rate (SVR) drift

When a fixed or introductory deal ends, many borrowers move to the lender’s SVR. SVR rates are set by the lender and can be higher than the deal rate you were paying.

This matters if:

• Your deal ends and you haven’t remortgaged
• Your circumstances change (income, affordability, or property plans)

Planning ahead can reduce the risk of being caught on a more expensive rate.

Product transfer fees

Some lenders charge fees when you switch to a different product with the same lender without completing a full remortgage.

Even if you stay with the same lender, these fees can affect the true cost of switching.

How to compare mortgages on total cost, not just headline rate

To avoid surprises, it helps to compare mortgages using total cost over the period you expect to keep the deal, rather than focusing only on the interest rate.

Use APRC and total cost thinking together

• APRC (Annual Percentage Rate of Charge) is designed to reflect overall cost, including certain fees.
• However, it still helps to look beyond the headline figure and consider what could happen if you exit early or your deal ends.

A practical way to sanity-check fee vs rate

A common pattern is:

• Fee-free or low-fee products may come with a slightly higher rate.
• Lower-rate products may include higher fees.

Which is better depends on how long you expect to keep the mortgage and whether you’re likely to repay early.

Ask the right questions before committing

When comparing products, it’s useful to clarify:

• What fees are upfront versus added to the loan
• Whether there are penalties for switching or repaying early
• What happens at the end of the deal (including the likely rate position)
• Any product transfer costs if you plan to stay with the same lender

Illustrative first-time buyer deals. Check fees, eligibility and total cost for your circumstances; rates may change.

Planning ahead: avoiding surprise costs

Budgeting for mortgage costs is about more than adding up fees. It’s also about understanding timing and how costs are paid.

Upfront vs added-to-mortgage fees

Some lender fees can be paid upfront or added to the mortgage. Adding fees can increase the total amount borrowed, which may affect the overall cost over time.

Costs can be due at different stages:

• Before completion: booking fees, valuation fees, and survey costs.
• Around completion: legal and conveyancing fees, and some lender charges.
• After completion: ongoing insurance premiums and any moving-related expenses.

Even with careful planning, there can be small variations in quotes (for example, search fees or survey requirements). A modest buffer can help prevent last-minute funding issues.

First-time buyer budgeting: what to include

First-time buyers often focus on the deposit and monthly repayments, but the total cash needed to complete can be higher than expected.

If you’re using a government-backed scheme or buying with a specific structure (such as shared ownership), the overall cost picture can still include many of the same fee categories, though the details may differ.

For a closer look at repayment choices, see interest-only mortgages for first-time buyers.

Building a realistic budget: a three-stage cash-to-complete framework

A helpful approach is to plan for:

1. Upfront costs you may need before completion (for example, survey and legal work)
2. Completion-related costs (such as SDLT, where applicable)
3. Moving costs and any short-term expenses after you move

If you’re comparing different properties or mortgage options, consider how each one affects the overall cash requirement, not just the monthly repayment.

How mortgage costs can vary

Mortgage costs aren’t identical for every borrower. Key factors that can influence what you pay include:

• Property type and value (affects survey and valuation requirements)
• Property age and condition (affects the likely survey level)
• Lender and product choice (fee structures differ)
• Whether you’re remortgaging or porting (exit charges and product rules)
• Timing and complexity of the transaction (can affect legal work and searches)

Frequently asked questions

Summary: the full cost of a mortgage is more than the interest rate

A mortgage can be one of the biggest financial commitments you’ll make, but the overall cost includes more than interest. By planning for lender fees, survey and valuation charges, legal and conveyancing costs, and moving expenses, you can create a clearer budget and reduce the risk of unexpected shortfalls.

If you’re comparing mortgage options, it’s typically helpful to look at the full cost package, fees, timing, and any potential charges linked to changing or exiting the mortgage later, rather than focusing on one figure alone.