Fees for remortgage

Lifes_Grand_Plan

Hi guys,

Currently looking at my first ever re-mortgage...

I was just wondering what fees I am likely to face when remortgaging such as valuation fees and the like... some lenders seem to pay some of these for you but its all very confusing...

Also noticed some offer to pay your legal fees providing you use their solicitors... is that ok or am I likely to have problems with that (conflict of interest etc?)

Cheers

kingstreet

The issue of set-up costs is one you should address every time you take out a new mortgage, whether purchase or remortgage.

Paying fees is pretty much dependent on how you will benefit from the rate you are getting and how much you are borrowing.

If you are taking out a £50,000 mortgage, you'll almost certainly be better off with a fee-free deal where there's no arrangement fee, no valuation fee and the legal work is paid for by the lender. The mortgage rate is not as important, as the difference may only be a few pounds a month.

On the other hand, a large mortgage needs the best possible rate and to get that it may be worth paying the fees I mentioned, as the difference in the monthly costs makes up for the set-up fees.

It's difficult to say where the pivot lies, but I'd say somewhere in the £120,000 region for a twenty-five year mortgage.

To work it out, calculate the total of the monthly payments during the offer period and add to it any fees you have to pay. Do that for the deals you are considering. When you finish, the lowest total should be the best for you. Don't forget other issues like early repayment penalties in your selection process as they can also have a bearing later.