Welcome to our Mortgage Fees Charged by Mortgage Lenders page at Mortgages UK.

The purpose of this page is to list the various mortgage fees that are typically charged by mortgage lenders. The idea is that if you know what charges may be imposed you will be able to look for them and compare true mortgage costs more easily.

Early Repayment Charge - Charge if you want to repay your mortgage before the mortgage term is complete.

E.g. it might be a percentage of the outstanding balance of your loan until a particular date.

Let's say it was 3% of the outstanding balance of a £75,000 mortgage, then the maximum charge you could pay would be £2,250.

Fee for Arranging Buildings Insurance Elsewhere - Some lenders may make a charge if you arrange your buildings insurance elsewhere. (Example charge £25, as at May 2011).

Higher Lending Charge (HLC) - An additional charge by the lender made when you want to borrow more than a given Loan to Valuation ratio, typically of more than 90%. The HLC was previously known as the Mortgage Indemnity Guarantee Fee, as in the past lender's would use the fee to take out an insurance policy to provide themselves with additional protection against their financial loss in the event of repossession. HLCs aren't that common any more.

The HLC is usually calculated as a percentage, typically 8%, of the amount being borrowed above the HLC Threshold. For example:

You need a mortgage of £100,000 and need to take a 100% mortgage. The lender's HLC threshold is 90%, so the HLC charge will be 8% on the remaining £10,000, i.e. £800.

Mortgage Booking Fee (aka Application Fee) - A non-refundable fee charged to secure a particular mortgage deal.

Mortgage Broker Fee - If you decide to ask a mortgage broker to help find your mortgage, then you will be paying a fee to the broker. You should ask to be made aware of how a broker charges their fee before taking their advice. Some will charge fees via an hourly rate or a set fee upfront, whether or not your mortgage application is successful. Others will take a commission from the mortgage lender.

Mortgage CHAPS Fee - Fee for the same day electronic funds transfer of the mortgage loan amount from the lender to your solicitor. CHAPS is a UK clearing system used for same day payments in Sterling.

Mortgage Exit Fee - Fee charged for exiting your mortgage before the full term, e.g. if you decide to switch mortgage provider.

Mortage Product Fee (aka Mortgage Arrangement Fee) - Provider's fee for providing you with this particular mortgage product. You can pay this fee upfront, or you may be able to add the product fee to the mortgage.

The mortgage product fee is usually non-refundable, so if you pay up front you risk losing the fee amount if your mortgage application is rejected or if you decide you don't want to go ahead.

If you add the amount to your mortgage, then clearly you are borrowing more and your monthly payments will be more.

If you have the funds available but don't wish to risk losing the fee, you could add it to the mortgage and then you may be able to immediately overpay the mortgage so you are back to your original mortgage amount.

Note that mortgage product fees have been increasing in recent years. This is because there has been competitive pressure to have a low interest rate for the mortgage best buy tables, so the lender offsets this by a larger product fee.

As at May 2011, mortage product fees are typically up to £1,000, but they vary according to the mortgage chosen.

Mortgage Legal Fees - Your lender's charge for their legal fees.

Expect to pay £100+ depending on the amount of work the lender's legal adviser has to do.

Mortgage Valuation Fee - Your lender needs to know that the property you intend to buy is worth enough to provide enough security for their loan. The lender will send a professional valuer, and you will need to pay the fee for their valuation. This valuation is purely for the lender's benefit and looks at the property's market value and briefly at its condition. It is not a full survey, and may not pick up on major structural problems in the property. If you want the peace of mind of a full survey, that is something you have to pay for yourself separately.

Expect to pay £200+ (correct as at May 2011), increasing with the value of the property.

Thanks for visiting our Mortgage Fees Charged by Mortgage Lenders page. We hope it helped find what you were looking for.