The Hidden Costs of Remortgaging in 2025 & How to Avoid Them

While remortgaging can save you money, there are also hidden costs you need to be aware of.

Common Hidden Costs of Remortgaging

1. Early Repayment Charges (ERCs)

• If you remortgage before your fixed deal ends, you may face fees of 1-5% of your loan amount.
• Avoid it by checking your mortgage terms before switching.

2. Valuation & Legal Fees

• Some lenders charge £300-£500 for a valuation.
• Legal fees can range from £500-£1,500, though some lenders offer free legal work for remortgages.

3. Exit Fees

• Some lenders charge an exit fee (around £100-£300) for closing your mortgage early.

4. Arrangement Fees

• Many lenders charge a setup fee (£999-£2,000) for new mortgages.
• Some brokers also charge fees, but fee-free brokers exist.

5. Higher Monthly Payments

• If your LTV (Loan-to-Value) ratio is high, you might not get the best interest rates.
• Solution: Pay off some of your mortgage before remortgaging.

How to Minimise Remortgaging Costs

✅ Start the remortgage process early – Avoid rolling onto a lender’s expensive SVR.
✅ Use a mortgage broker – Find deals with low/no fees.
✅ Ask about cashback deals – Some lenders offer cashback on completion.

💡 Tip: The savings from a better mortgage deal should outweigh the costs of remortgaging – always do the maths before committing.