Remortgage Costs - Early Repayment Charge
If you take a look at your existing mortgage it includes exit fees or early repayment charges. A valuation and solicitors costs will be due to you when you decide to change lenders even though you may find some lenders who can provide you remortgages at no fee.
Suppose you’re not entirely sure about the sums and you feel it’s a bit complicated. In that case, it is recommended that you speak to your current mortgage provider and receive the advice of an independent financial advisor.
Looking at remortgage costs
Switching can reduce your payment. However, there are incurring costs related to remortgaging or switching lenders:
- There might be high early repayment charges to pay if you are leaving before the initial locked-in period of your mortgage, which is before it expires. They are unlikely to be charged if you’re on your lender’s standard variable rate.
- Your new lender might charge you a valuation and legal fees, although these are often waived if your remortgage is completed. Always ask about these fees when comparing products.
- There is likely to be an exit fee to pay when you leave your current lender. Factor this into your costs.
- There is also usually a booking or arrangement fee to pay on the new deal – you can opt for a fee-free sale to avoid booking or arrangement fees, but you might end up paying a higher interest rate as a result.
- Weigh up the total cost of any remortgage against the savings you’ll make before you take the plunge and remortgage.
Check your costs
- Before you switch, be sure to check out the costs.
- Some lenders might offer fee-free deals to tempt you, but if they don’t, you’ll have legal, valuation and administration costs to pay.
- You can use the Annual Percentage Rate of Charge (APRC) to help you compare deals.
The APRC is a way of calculating interest rates that incorporates some mortgage-related fees in the calculation, giving you a way to compare mortgage deals.
What might look like a money saving deal could end up losing you money if you don’t do the necessary calculations. Visit SmartMortgagesUK.