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What fees will I incur when taking out a mortgage?

When buying a house, there are a number of fees and charges that you’ll have to pay on top of your mortgage deposit and any subsequent repayments. Most people are familiar with stamp duty and conveyancing costs but we rarely think about the fees to be faced when taking out a mortgage.

In this article, the IMC team walk you through these fees, ensuring that you are familiar with any additional mortgage fees you will incur during the home buying process. It is possible that you could find yourself spending in excess of £2,000 before you even get your mortgage, so you absolutely need to be aware of the costs. Before you get a mortgage, there are a number of fees you will have to pay during your application. We’ve outlined these below.


Arrangement & valuation fees

Arrangement fees are the mortgage fees that you pay to your lender to, well – arrange your mortgage. These fees vary but could be the most expensive additional fee on top of your mortgage. They could set you back up to £2,000. That said, most lenders will charge around £1,000 in arrangement fees. Some lenders will offer to add the arrangement fee on top of your loan rather than you having to pay it up front. Although, however tempting this option might sound, due to interest rates paid on the total cost of the mortgage, you will actually end up spending more than the initial arrangement fee.

You will also have to pay a valuation fee that pays for your lender to survey the property you want to buy, confirming that the mortgage they lend will be accurate. The cost of a valuation fee varies considerably depending on location, lender and property but is offered free of charge by the majority of lenders. However, you may wish to instruct your own Homebuyers survey, cost dependent upon purchase price of property


Legal fees

As we have mentioned, many people are already aware that they will have to pay stamp duty and conveyancing fees. Stamp duty is a tax that is paid to the government on properties of up to £125,000. The amount paid is adjusted based on the cost of the property. While this tax is not associated with the mortgage and will be paid to a solicitor, it will be paid at around the same time as other mortgage fees. Therefore, it is still very important that you keep it in mind when taking out a mortgage.

Alongside the stamp duty, you will also have to pay a conveyancing fee to your solicitor. In short, this covers all of the legal work that comes with buying a home, including the transfer of ownership documents and any planning permission issues. Conveyancing fees will set you back around £500 – £1,500, however some mortgage lenders will include this for free (if you opt to use a solicitor of the lender’s choosing).


Advisory fees

When applying for a mortgage, it is always best to seek professional, impartial financial advice to ensure that you are getting the best deal for your personal financial situation. When choosing a financial advisory company – we’d recommend the mortgage team here at IMC, of course – be aware of the fees that they may charge for their service. Although not too high, they will be there, but will almost certainly be worth paying.


Mortgages are costly. Be sure to seek out independent mortgage advice to ensure that you choose the right mortgage for you and your lifestyle. Acting primarily as insurance and mortgage financial advisors, IMC has been successfully operating in the financial sector since 1996.

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