Costs and Fees When Remortgaging: A Complete Guide

Remortgaging can save you hundreds of pounds each month on your mortgage repayments, but it is essential to understand the full cost of switching before you commit. Many homeowners focus solely on the headline interest rate and overlook the fees that come with a new mortgage deal. In this guide, we break down every cost you can expect when remortgaging in 2025 so you can make an informed decision.

At Option Finance, we help homeowners across the UK navigate the remortgaging process from start to finish. Whether you are coming to the end of a fixed rate or simply want to explore your options, understanding the fees involved is the first step towards making a smart financial move.

Arrangement fees

The arrangement fee — sometimes called a product fee or completion fee — is the charge your new lender levies for setting up your mortgage. In 2025, arrangement fees typically range from around £500 to £2,000, though some lenders charge nothing at all.

You usually have two options for paying arrangement fees:

• Pay upfront — you pay the fee when your mortgage completes, either from savings or as part of the conveyancing process.
• Add it to the loan — the fee is rolled into your mortgage balance. While this avoids an immediate outlay, you will pay interest on it for the duration of the mortgage term, which can make it considerably more expensive in the long run.

For example, adding a £1,500 arrangement fee to a 25-year mortgage at 4.5% interest would cost you approximately £2,500 in total once interest is factored in. Our mortgage calculator can help you model these scenarios.

It is also worth noting that some of the lowest interest rates come with the highest arrangement fees. A deal with a slightly higher rate but no fee could work out cheaper overall — something we always check for our clients at Option Finance.

Valuation fees

When you remortgage, your new lender will need to value your property to confirm it provides adequate security for the loan. The cost of this valuation depends on the value of your property and typically ranges from £150 to £1,500 for higher-value homes.

However, many lenders in 2025 offer free standard valuations as part of their remortgage package. This is one of the perks of switching, as lenders compete to attract your business. A free valuation can save you several hundred pounds and is something to look for when comparing deals.

If you are remortgaging with adverse credit, some specialist lenders may require a more detailed valuation, which could carry additional cost. It is worth discussing this with a broker early on so there are no surprises.

Legal and conveyancing fees

Remortgaging involves legal work to transfer the mortgage charge from your old lender to the new one. You will need a solicitor or licensed conveyancer to handle this process. Legal fees for remortgaging typically cost between £300 and £600.

The good news is that many lenders cover your legal costs as part of the remortgage deal. They appoint their own solicitor to act on your behalf, and you pay nothing. This is often referred to as “free legals” and is a common incentive offered alongside free valuations.

If you prefer to use your own solicitor, you are usually free to do so, but you will need to pay their fees yourself. In most straightforward remortgage cases, the lender’s free legal service is perfectly adequate.

There can be additional legal costs if your circumstances are more complex — for example, if there is a lease extension involved, if the property is a shared ownership home, or if there are restrictions on the title. You can learn more about shared ownership remortgaging in our guide to remortgaging a shared ownership property.

Early repayment charges

One of the most significant costs to consider is the early repayment charge (ERC) on your existing mortgage. If you are still within a fixed, tracker, or discounted rate period, your current lender may charge you a penalty for leaving early. ERCs are typically calculated as a percentage of the outstanding mortgage balance and can range from 1% to 5%.

On a £200,000 mortgage, a 3% ERC would cost you £6,000 — a substantial sum that could easily wipe out any savings from switching to a lower rate. This is why timing your remortgage is crucial. Most ERCs reduce year by year and disappear entirely once your initial deal period ends.

Before proceeding, always check:

• The exact ERC percentage on your current mortgage
• When your ERC period expires
• Whether the savings from a new deal outweigh the ERC cost

Our remortgage calculator can help you work out whether switching early makes financial sense. In some cases, even with an ERC, the savings over the new deal term can justify the cost — particularly if your current rate is significantly higher than what is available.

Broker fees

Working with a mortgage broker can save you time and money, but some brokers charge a fee for their services. Broker fees vary widely and can range from a few hundred pounds to £500 or more, depending on the complexity of your case.

At Option Finance, we are transparent about our fees and always explain our charging structure upfront. As whole-of-market brokers, we have access to deals from over 90 lenders, including exclusive rates that are not available directly to the public. The savings we find often far exceed any fee we charge.

If you are a first-time buyer looking at your options or a homeowner considering a buy-to-let remortgage, having a broker on your side can be particularly valuable. We handle the paperwork, chase lenders, and ensure your application runs smoothly.

Exit fees and deeds release fees

Your current lender may charge a small fee when you leave, often called a mortgage exit fee or deeds release fee. This covers the administrative cost of closing your mortgage account and releasing the charge on your property.

Exit fees are typically modest — around £50 to £300 — but they are worth factoring into your calculations. Some lenders have scrapped this charge altogether, while others continue to apply it.

Your mortgage offer document or annual statement should detail any exit fees applicable to your account. If you cannot find this information, your current lender’s customer service team can confirm it.

Costs that do not apply when remortgaging

It is worth clarifying a few costs that you will not need to pay when remortgaging:

• Stamp Duty Land Tax — remortgaging does not trigger SDLT because you are not purchasing a property. You are simply changing the mortgage secured against your existing home. If you are curious about stamp duty for a future purchase, our stamp duty calculator can help.
• Estate agent fees — since you are not selling, there are no agent commissions.
• Survey costs — while the lender will value the property, you do not need to commission a homebuyer’s report or full structural survey as you would when purchasing.

These exemptions make remortgaging considerably cheaper than moving home, which is one of the reasons it is such a popular option for homeowners looking to reduce their monthly outgoings.

How to calculate whether remortgaging is worth the cost

To determine whether remortgaging makes financial sense, you need to compare the total cost of switching against the total savings over the new deal period. Here is a simple framework:

Step 1: Calculate your total switching costs

Add up all applicable fees:

• Arrangement fee
• Valuation fee (if not free)
• Legal fees (if not free)
• Early repayment charge (if applicable)
• Broker fee (if applicable)
• Exit fee from current lender

Step 2: Calculate your monthly savings

Work out the difference between your current monthly payment and the payment on the new deal. Our repayment calculator makes this straightforward.

Step 3: Calculate the payback period

Divide your total switching costs by your monthly savings. This tells you how many months it will take for the savings to cover the costs.

Step 4: Compare against the deal period

If the payback period is shorter than the new deal period, remortgaging is likely worthwhile. If it takes almost the entire deal period to break even, the benefit is marginal and you may be better staying put.

For example, if your total switching costs are £1,200 and your monthly saving is £150, it would take 8 months to recoup the costs. On a 5-year fixed deal, you would then enjoy 52 months of clear savings — a strong case for switching.

Hidden costs and things to watch out for

Beyond the headline fees, there are a few less obvious costs and considerations:

• Higher lending charges — if you are borrowing more than 75% or 80% of your property’s value, some lenders apply an additional fee or load the interest rate. Reducing your loan-to-value ratio can unlock better deals.
• Cashback clawback — some mortgage deals offer cashback on completion, but if you remortgage again within a set period, you may have to repay some or all of it.
• Insurance requirements — your new lender will require buildings insurance as a minimum. If you are switching insurers, compare costs carefully.
• Overpayment limitations — some new deals restrict how much you can overpay each year. If you plan to make overpayments, check the terms carefully. Our overpayment calculator can show you the impact of regular overpayments on your mortgage balance.

Getting the best deal on costs

Here are some practical tips for minimising the cost of remortgaging:

1. Start early — begin looking at deals 3-6 months before your current rate expires to avoid falling onto the standard variable rate (SVR).
2. Compare total cost, not just rates — a lower rate with high fees can cost more overall than a slightly higher rate with no fees.
3. Look for free valuation and free legal deals — many lenders offer both, which can save you £500-£1,000.
4. Avoid ERCs — wherever possible, wait until your current deal period ends before switching.
5. Use a broker — we can access exclusive deals and identify the most cost-effective option for your circumstances.
6. Consider your LTV — if your property has risen in value, you may be in a lower LTV band, which unlocks better rates and lower fees.

If you are self-employed, the process may require additional documentation, but the cost structure is essentially the same. Our team at Option Finance has extensive experience helping self-employed homeowners find competitive remortgage deals.

The role of your credit score in remortgaging costs

Your credit history does not just affect whether you can remortgage — it directly impacts the costs you face. Borrowers with excellent credit records gain access to the lowest arrangement fees and the most competitive interest rates. If your credit is less than perfect, you may find yourself limited to specialist lenders who charge higher fees.

Before starting the remortgage process, it is worth checking your credit report with all three UK credit reference agencies — Experian, Equifax, and TransUnion. Look for errors, outdated information, or accounts that should be marked as settled. Even small corrections can shift your credit score enough to unlock a better deal.

If you have any concerns about your credit profile, our adverse credit page explains how we help homeowners with credit issues find suitable remortgage options. The key is to work with a broker who understands the specialist lending market and can match you with the right lender from the outset, avoiding unnecessary application fees and wasted searches on your credit file.

For first-time buyers reaching the end of their first mortgage deal, the credit file you have built over the past few years of homeownership can be a real asset — regular mortgage payments demonstrate financial reliability and can help you access lower-cost remortgage products.

Next steps

Understanding the costs involved in remortgaging puts you in a strong position to make the right decision. The key is to look beyond the headline interest rate and consider the total cost of switching — including arrangement fees, legal costs, valuation charges, and any early repayment penalties.

At Option Finance, we provide a full cost-benefit analysis as part of every remortgage enquiry. We compare deals across the whole market, factor in every fee, and present you with clear recommendations based on your specific circumstances.

Ready to find out how much you could save? Use our remortgage calculator for a quick estimate, or get in touch with our team for a free, no-obligation remortgage review. We will assess your current deal, search the whole market, and give you an honest recommendation — even if that means staying with your current lender.