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Mortgage costs and fees explained

The price of buying a home

When you’re planning to buy a property, there are various costs you need to prepare for.

Costs and fees to consider

Don’t be put off by our list. We’ve included all the costs you could face – but you might not have to pay all of them. We’ll explain as we discuss each one. Any fees associated with the mortgage will be set out clearly in the documents your lender or mortgage broker gives you before you commit to any specific mortgage.

  • Deposit 

    Most lenders will ask for a deposit of at least 5% – if you’re a first-time buyer, find out about ways to help you save for a deposit.

    Mortgage product fee

    The mortgage you apply for might include a fee. You can pay this by card, cheque or bank transfer when you apply. You could choose to add it to the mortgage balance instead, although that means you’d pay interest on it until you pay off the mortgage. Fees typically range from about £500 to about £2,000.

    Broker fee

    Arranging your mortgage with a broker means you might have to pay them a fee. If you choose to do this rather than applying directly to a lender, your broker will explain all the fees you’ll have to pay before you agree to work with them.

    Valuation fee

    Mortgage lenders carry out a valuation of the property as part of processing your application. Depending on the mortgage you choose, the lender might not ask you to pay this fee – but double-check with them or your broker. 

  • Survey

    It’s a good idea to hire a surveyor to check the property for damage and issues that could cost you money in the future. It’s not a legal requirement, but it’ll help you avoid problems further down the line. Issues found in surveys can also help you renegotiate the price with the seller. The Residential Property Surveyors Association (RPSA) and the Royal Institution of Chartered Surveyors can help you find a qualified surveyor to give you a quote. 

    Estate agent fees for selling

    Whether you’re using a high-street estate agent or an online service, you’ll need to pay a fee for selling your property. It’ll either be a percentage of the sale price (often between 1% and 3%) or a flat fee. Make sure the quote you get is clear about whether VAT is included.

    Solicitor fees

    Solicitors and conveyancers will charge from about £500 for their services – they’ll give you a quote based on your circumstances. Again, make sure you understand the total cost, including VAT.

    Local search fees

    Your solicitor needs to pay the local authority to carry out checks to see if there are any plans or problems that could affect you when you become the property owner. The average cost of this is about £300, but check with your solicitor.

    Property sale tax 

    Depending on where you are in the UK, you might have to pay tax on your property purchase. The following government websites provide details of their respective taxes, and calculators to help you work out the potential cost.

    Money transfer fee

    Most lenders charge a fee for transferring the mortgage money you’ve borrowed to your solicitor, so that the solicitor can complete your property purchase. This is usually around £40 to £50.

    Other purchase costs

    If your solicitor has to undertake any additional work because of your personal circumstances, they’ll charge you for it. For example, if you’re selling a property that’s co-owned with a former partner, or you share debts with them, you may need to reach an agreement about how the sale money is divided. If this is an issue for you, your solicitor will explain.

    Land registry fee 

    This fee covers updating the national Land Registry to show that you now own the property with a mortgage. This is often rolled into the list of fees your solicitor deals with. It’s tied to the purchase price and can be anything from about £50 to more than £1,000. In Scotland, there’s also a title registration fee to pay.

  • Buildings insurance

    Having this type of insurance is a condition of most mortgages. The cost will depend on the size, age and construction type of the property. You can get a quote for buildings insurance from us.

    Life insurance

    This isn’t a condition of getting a mortgage, but you should consider it. Life insurance can make sure your mortgage debt is covered if you die or become seriously ill, meaning that your loved ones won’t have to worry about any chance of losing their home. You can get a life insurance quote from us.

    Contents insurance

    Protecting valuables from damage and theft is an important consideration for all homeowners. You can get a quote for contents cover or combined buildings and contents insurance from us.

  • Moving costs

    You could hire a van and take care of moving your own furniture, but professional movers make light work of transporting large amounts of furniture and valuables. One important thing to check is whether they provide insurance, just in case something is lost or damaged in transit.

    Essential furnishings

    Have a think about anything you’ll need to buy straightaway, especially if you’re a first-time buyer. Settling into your new home is much easier when you have a comfortable place to sleep, eat or relax.

    Connection cost for TV, broadband and phone

    Before you move, check which services are available at your new home, and contact providers for quotes. It’s best to start planning this as soon as you have a completion date confirmed, as there may be a waiting list to get connected.

    Ongoing leasehold fees

    If you buy a leasehold property, you might be responsible for ground rent and maintenance costs. Your solicitor should confirm these costs before you commit to the purchase. 

    Parking fees 

    An increasing number of streets now have controlled parking zones. Check this with the local authority (most have parking guidance for residents on their websites). If you have a car and are moving to a controlled parking zone, you’ll need to register your vehicle with the council and pay a fee for a full or temporary permit. Parking without a permit could lead to a fine – and this could include the van that contains your furniture as well as your personal vehicle.

    Council tax

    Check with the local authority to find out what your council tax charge will be, as it may be significantly different from how much you currently pay – especially if you’re moving to a new local authority area or a larger property.

Your mortgage options

First-time home buyers

Start the journey to your first home

Find out how to buy a home and take out a mortgage, get tips on what to do if you can’t save the deposit you need and work out much you could borrow.

How to get a mortgage for your first home

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We’ll show you how to get a mortgage from start to finish, including what you need to tell us and the steps you’ll need to take.

Mortgages for moving home

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We’ll help you find a new mortgage deal for your new home – take a look at our latest rates, and read our guide to getting a mortgage with us.

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