Mortgage fees and charges

Taking out a mortgage costs more than the deposit and the monthly payments. Lenders charge fees to set the loan up, value the property and administer the account, and if you use a broker or adviser there may be a fee for that too. Arrangement fees alone typically run between £500 and £1,500¹, and on the best fixed rate deals the most common fee in January 2026 was £999 for first-time buyers and home movers, rising to £1,999 for people remortgaging².

Fees matter because they change which deal is actually cheapest. A mortgage with a low rate and a £1,999 fee can cost more over the deal than a slightly higher rate with no fee at all. Research by Which? found the lowest fee-free rate is generally only around 0.1 percentage points higher than the lowest overall rate, costing roughly £15 a month more, or £180 a year². On a small loan, that makes the fee-free deal cheaper. On a large loan, paying the fee to get the lower rate can win.

This page explains each fee, what it typically costs, when you pay it, whether you can add it to the loan, and how fees differ between deals. It sits alongside the wider guide to mortgages, and the fees covered here are separate from the interest itself, which is explained in how a mortgage works.

What mortgage fees and charges cover

The fees around a mortgage fall into three broad groups: fees to get the loan, fees that are part of buying or moving home, and fees charged while you hold the mortgage or when it ends.

Fees to get the loan include the arrangement or product fee, booking and application fees, and the valuation fee. Nationwide lists mortgage product fees, legal fees, stamp duty, property surveys and moving expenses among the costs of buying that a mortgage loan does not cover⁷. West Brom puts arrangement, completion or product fees at between £500 and £1,500⁸, and Cambridge Building Society puts the combined application, valuation and associated mortgage fees at anywhere from a few hundred pounds to as much as £2,000, depending on the property's value and the lender⁹.

Fees while you hold the mortgage include charges for changing the deal, borrowing more, or consenting to something like letting the property. Shelter Cymru advises always checking your mortgage agreement before making any change, to see whether fees or penalty charges would apply¹⁰. At the end, most lenders charge a mortgage exit fee, and leaving a deal early can trigger an early repayment charge, which on large balances can run to tens of thousands of pounds¹¹.

Because the fee landscape is confusing, lenders must show one figure that pulls the costs together: the APRC. Halifax explains that the APRC covers all the extra fees and charges included in your mortgage costs, including mortgage interest rates, legal fees and other lender charges¹². The APRC spreads fees across the whole mortgage term, which makes deals easier to compare but can understate the cost of a short deal with a large fee. The page on how the APRC is worked out covers this in detail.

One thing fees do not include: the ongoing costs of owning the home. Northern Ireland's official home-buying guidance lists mortgage repayments, mortgage protection insurance, life assurance, contents insurance, rates, utility bills, ground rent and service charges as the regular costs you need to budget for alongside the mortgage itself¹³.

Arrangement fees: paid upfront or added to the loan

The arrangement fee, also called a product fee or completion fee, is the charge for taking out the mortgage deal itself. It is the largest fee most borrowers face and the one that most changes the maths of comparing deals.

Typical amounts vary by the type of borrower. Which? found that for home movers or first-time buyers on fixed rate deals, fees of around £999 are common, while remortgagers are typically charged higher fees, with many close to £2,000¹⁴. Its January 2026 analysis of leading deals found average fees of £1,079 on top two-year fixes for first-time buyers, £1,185 for home movers on two-year fixes and £1,236 for home movers on five-year fixes; for remortgagers the averages were £1,673 on two-year fixes and £1,349 on five-year fixes². The highest fee it found on a mortgage product was £3,999², and the majority of products had fees of £1,000 or less². Which? also notes that some lenders offer low rates but charge fees of up to £3,999, and that around £1,000 is a common lender charge¹⁵.

Most lenders give you a choice of how to pay. NatWest explains that you can choose to pay the fee upfront or add it to your mortgage balance, but if you add it you will pay interest on it⁴. Accord Mortgages similarly states its product fee can be paid upfront, prior to offer, or added to the total mortgage amount¹⁶. first direct notes that some lenders allow you to add the arrangement fee to your mortgage, which increases the amount you borrow and repay each month, and on which you may pay interest¹⁷.

Adding the fee is not free money. Which? is blunt about the consequence: adding the fee to the mortgage balance "will mean you pay interest on the fee, costing you far more overall"⁵. In one remortgage example analysed in January 2026, adding the fee to the loan cost an additional £480 over a two-year term². On a 25-year mortgage the effect would be far larger, because the fee sits in the balance attracting interest for decades.

A few practical points:

• Percentage-based fees exist. Which? reports that percentage fees are generally for properties over £750,000 and are much more common with buy-to-let mortgages². It also notes percentage-based upfront fees are more likely on larger mortgages, such as loans of more than £500,000 or £750,000¹⁸.
• Some deals have more than one fee. Just 10% of residential mortgages have more than one upfront fee, according to Moneyfacts data checked in August 2026, but the most expensive fees come to almost £4,000¹⁸.
• Fee-free deals exist. Some mortgages are offered with no arrangement fee at all, while others come with fees well over £1,000¹⁹.

If a purchase falls through, the product fee is usually the one fee that is refunded. Yorkshire Building Society states that if the purchase falls through, you get your money back²⁰, and Leeds Building Society says the product fee may be refundable if the mortgage does not complete²¹. Booking fees are different, and are covered under when fees fall due.

Valuation fees and what the survey is for

Before a lender will lend, it needs to know the property is worth roughly what you are paying for it. The valuation is carried out for the lender's benefit, not yours: it is a brief inspection that confirms the property provides adequate security for the loan. The fuller inspections that tell you about the condition of the property are home surveys, covered on the mortgage valuations and surveys page.

Where the valuation is not free, it typically costs around £100 to £300¹. Which? explains the different ways lenders charge: some charge a flat fee, for example £100, while others use a sliding scale based on the property's value, and the cost should not come to more than a few hundred pounds²². Many lenders offer free valuations as part of their mortgage deals²², which is one of the incentives, like cashback, that can offset a higher fee elsewhere.

The fee is payable early in the process, usually when you apply. That timing matters if the purchase falls through: Accord Mortgages states that once a valuation has been carried out, the fee will not be refunded if the mortgage does not proceed¹⁶. The same applies in other lending markets. Equity release providers charge a fee to the surveyor who inspects the property to give the provider an independent estimate of its value, and Business Debtline notes you usually pay this when you apply, with the amount depending on the estimated value of your home²³.

Valuation fees also arise outside a purchase. If you port your mortgage to a new home, you will usually pay a valuation fee so the lender can check the new property is worth roughly what you plan to pay, and even if you keep your existing mortgage without borrowing more, you may still have to pay certain fees such as a valuation survey fee¹¹. Remortgaging can involve a valuation fee too, alongside application fees and solicitor's fees²⁴.

Mortgage broker fees: free, flat or a percentage

A mortgage broker or adviser searches the market and helps you apply. Whether you pay for that, and how much, varies by the type of firm you use.

Most traditional advisers do not charge for the advice itself. Scope explains that most mortgage advisers give advice for free, and charge a fee only if you choose to take financial products they have found for you²⁵. Where a fee is charged, NatWest puts the typical range at £300 to £600, either as a flat rate or a percentage of the mortgage value, and notes some brokers are paid commission by the lender instead⁴. HOA's cost guides put broker fees at a few hundred pounds up to 1% of your mortgage, with a typical fee of 0.3% of the amount borrowed at one large broker¹.

Online-only brokers are usually the cheapest route to advice. Which? found that in most cases you will not need to pay for the advice you receive from online mortgage brokers²⁶. The trade-off is a more self-directed process, which suits borrowers comfortable researching deals themselves; a face-to-face adviser suits those who want help with a complicated situation, such as bad credit or self-employment. The page on mortgage advice: brokers, advisers and applying direct covers the choice in full.

Two things are worth knowing about how broker fees interact with the mortgage itself. First, a broker fee counts towards the cost of your credit: the FCA's rules on the total charge for credit include any fee payable to a mortgage intermediary for arranging the contract²⁷. Second, if you withdraw your mortgage application, the lender must refund fees you paid, but this excludes fees paid for advice provided by a mortgage lender or intermediary²⁸, so a broker's advice fee is generally not refundable.

Higher lending charges on high loan-to-value mortgages

A higher lending charge is a fee a lender may impose when you borrow a high proportion of the property's value. It is the modern name for an old product: National Debtline records that the charges formerly known as mortgage indemnity guarantees became known as higher lending charges under the FCA rules from 31 October 2004²⁹. So the answer to whether a higher lending charge is the same as mortgage insurance is that it is the same thing under its current name, not a separate insurance policy you buy.

Higher lending charges are included in the regulated cost of the mortgage. The FCA's total charge for credit rules include both any fee payable to a mortgage intermediary for arranging the contract and any higher lending charge²⁷, so the charge must be reflected in the figures the lender shows you.

Not every borrower will meet one. They belong to the high loan to value end of the market, where the lender is taking more risk because the deposit is small. Related costs can arise elsewhere: if you port your mortgage to a more expensive property and need to borrow more, you may have to pay a fee to increase your loan or take on another mortgage product at a different rate¹¹.

If a lender quotes you a higher lending charge, the practical questions are the same as for any other fee: how much it is, whether it can be added to the loan, and how it changes the APRC. Because it counts towards the total charge for credit²⁷, it should appear in the comparison figures rather than arriving as a surprise.

A low rate with a high fee can cost more overall

The headline rate is only part of the cost of a mortgage. The fee can flip which deal is cheaper, and the bigger the loan, the more the rate matters relative to the fee.

The mechanics are simple. A fee is a fixed cost: £999 costs £999 whether you borrow £100,000 or £400,000. The rate is a percentage cost: 0.1 percentage points on £400,000 is far more per year than on £100,000. So large loans tend to justify large fees, and small loans tend not to.

Which?'s research in January 2026 quantified the trade-off. The lowest no-fee rate is generally around 0.1 percentage points higher than the lowest overall rate, and choosing a fee-free deal typically costs roughly £15 extra per month, or £180 per year². Against that, the most common fee on a leading first-time buyer or home mover deal was £999, and for remortgagers £1,999². Average fees on leading deals had also risen year on year: by £13 for first-time buyer two-year fixes, £19 for first-time buyer five-year fixes, £50 for home mover two-year fixes, £121 for home mover five-year fixes, £475 for remortgager two-year fixes and £127 for remortgager five-year fixes².

Incentives complicate the picture further. Which? found that 44% of mortgages offering cashback of at least £500 also charged higher upfront fees³⁰, so cashback is often funded by the fee rather than given on top of a cheap deal. About a third of mortgages include free or refunded legal fees³⁰, which is worth real money on a remortgage, where legal work is needed even though no property changes hands.

The practical way to compare is to work out the total cost over the period you expect to keep the deal: monthly payments for that period, plus the fee, minus any cashback or free services you would otherwise pay for. The ESIS illustration that a lender must give you shows the fees for each deal, and the APRC spreads them over the whole term. Citizens Advice notes that some charges, such as arrangement fees added into the total and early redemption fees, are not always captured in an APR comparison³¹, so read the illustration as well as the headline figures.

When fees fall due and how to pay them

Fees arrive at different points, and the timing determines what happens if the purchase falls through.

The booking or application fee is paid when you apply, and it is the fee most likely to be lost if things go wrong. Yorkshire Building Society states the booking fee is not refundable even if your house purchase falls through²⁰, and first direct warns booking fees can be non-refundable even if your mortgage falls through¹⁷. The valuation fee is paid before the offer, and once the valuation has been carried out it is generally not refunded if the mortgage does not proceed¹⁶.

The product or arrangement fee is typically paid at or before completion, or added to the loan¹⁶. If the purchase falls through before completion, the product fee is usually refunded²⁰. Accord Mortgages allows its product fee to be paid upfront, prior to offer, or added to the total mortgage amount¹⁶.

Some smaller charges work differently. NatWest explains that remortgage admin fees can typically be paid either upfront or at the end of the mortgage term, and are interest-free if charged at the end⁴. At the very end of the mortgage, Leeds Building Society notes you will usually have to pay a mortgage exit fee when you remortgage away⁶, and its mortgage terms explain a fee may be charged if you pay off your mortgage before the end of the term, possibly in addition to an early repayment charge²¹. Early repayment charges are covered in full on the early repayment charges page.

If money is tight while a sale is pending, the position is unforgiving: National Debtline advises that until the house is sold you remain liable for the monthly instalments and interest, as well as legal and estate agent's fees³². Fees are also payable again each time you take a new deal, which is why the cost of remortgaging and of product transfers needs checking against the savings from the new rate.

Where the protection lies, and where to get help

Mortgage fees are regulated, and several rules work in the borrower's favour.

Lenders must tell you, before you take the mortgage, whether each fee is refundable and to what extent. The FCA's rules require firms to disclose "whether or not the fee is refundable, and if so, the extent to which it is refundable"³³. If you withdraw your application, the firm must refund any fees you paid, excluding fees paid for advice provided by a mortgage lender or intermediary²⁸. These rules are part of the wider framework on mortgage rules, your rights and protection.

If you are struggling, the Mortgage Charter, agreed between the government and lenders in June 2023, sets out support borrowers can ask their lender for, but it comes with a warning of its own: monthly payments after the support may be higher than they otherwise would have been, and overall costs over the life of the mortgage will be higher³⁴. The page on the Mortgage Charter and how it helps you explains what it covers.

Where to get help:

• MoneyHelper offers free guidance on mortgages and fees, and can explain what a lender's illustration means.
• Citizens Advice covers how to compare the cost of credit deals, including which fees to look out for³¹.
• National Debtline and StepChange provide free debt advice if fees or arrears have become unaffordable²⁹.
• The Financial Ombudsman Service can consider complaints about fees that were not disclosed properly or charged incorrectly; see complaining to the Financial Ombudsman about your mortgage.

The simplest protection is your own vigilance. Check the ESIS illustration for every deal you compare, ask which fees are refundable and which are not, and check your mortgage agreement before making any change to the mortgage later on¹⁰. A fee that appears in the illustration cannot arrive as a surprise; a fee you never asked about sometimes does.