Mortgages with no fees at all are actually very unusual, as the majority of fee-free mortgages have valuation fees and legal fees to pay - usually just the arrangement fee is 'free'. How much would I pay for a no-fee mortgage? If you're remortgaging to release equity, however, this will be less important, as you're likely already raising your LTV with the higher loan. However, much like when you took out the initial mortgage, the lower the arrangement fee, the higher the interest rate is likely to be.Īs many people remortgage for the purpose of getting a lower interest rate, a remortgage with no fees won't necessarily always allow you to achieve the maximum savings. Yes, some lenders will offer no fee remortgages. This is because you typically pay interest on a mortgage for many years, whereas the arrangement fee is a one-off payment. This means that although the initial outlay is lower, the actual mortgage could still be more expensive overall.īy contrast, a mortgage with a larger arrangement fee may have lower interest rates, and can, therefore, work out cheaper overall. However, fee-free and low-fee mortgages often have higher interest rates than those with arrangement fees. Mortgage lenders offer no fee mortgages as an incentive to new customers. What is a fee-free mortgage?Ī fee-free mortgage is simply a mortgage with no fees. Usually this only means that the arrangement fee is free, although some mortgages may also offer free legal or valuation fees. The downside to doing this is that you’ll end up paying interest on the arrangement fee for the life of the loan, making it far more expensive in the long term. You can usually choose whether to pay the mortgage fee or add it to your mortgage so that you don’t need to find the cash upfront. You’ll also be shown the initial interest rate, the overall cost of the mortgage over the full term and the fees.Īrrangement fees average at around £1,000 to £2,000, however, they can be more or less expensive than this depending on the value of the property and how much you borrow.
When comparing mortgages you often see a table showing the type of rate, which could be fixed, tracker or discounted. Some lenders may also refer to this as an application fee, a mortgage product fee or a completion fee. Known under various names, mortgage arrangement fees are the set-up costs you pay the lender for the administration of your application. Professional indemnity insurance quotes.Back to Insurance Travel and Business insurance.Back to Insurance Life and Health insurance.Back to Insurance Home and Tech insurance.Back to Mobile phones News, reviews & guides.