Solicitors Fees for Remortgage
The average total fee when remortgaging your property is £3,553. In addition, you may also have to pay a percentage of the property value when paying an early repayment charge. Your total remortgage fee will consist of solicitor fees, the cost of leaving your current mortgage, and the cost of receiving a new deal.
If you wish to swap lenders before your current contract ends, you will likely have to pay a higher amount in fees. Some people wait until there are between three to six months left of their contract before they look for a new deal in order to avoid excessive fees.
In this guide, we’ll be taking you through the various remortgage fees and costs that you need to be aware of.
Here are the average costs for remortgaging, according to our data:
| Fee | Cost (£) |
|---|---|
| Conveyancing Fees | £1,078 |
| Leaving Current Deal | £175 plus 1-5% of property value |
| New Deal Cost | £2,150 |
| Total | £3,403 plus 1-5% of property value |
Solicitors Fees for a Remortgage
Solicitor fees come to an average total of £1,078 when remortgaging. Hiring a remortgage solicitor for a remortgage will provide a more efficient process.
When you are going through the remortgaging process, you will need to make sure that you account for your solicitor fees. Your solicitor fees will be made up of legal fees and disbursements.
The main solicitor fees are listed below:
Legal fees - £720 inc VAT
Your solicitor's legal fees will ensure that all the correct documentation and paperwork are submitted. It will also ensure that your remortgaging process is more efficient.
Legal fees can vary depending on a variety of factors with an average cost of £720, including VAT. When researching legal fee quotes, make sure that you check whether the cost includes VAT or not. If VAT is not included, the actual cost will be an additional 20%.
Search fees - £290
Your solicitor will need to conduct conveyancing searches. A full search includes a Local Authority Search, Environmental Search, and Water & Drainage Search. The results of these searches will point to any defects that can affect your property.
Not all lenders require searches to be conducted. However, this can be a precaution to determine whether the property's value is affected. Conveyancing search fees can be impacted by various factors. These include your location, property type, and whether the property is freehold or leasehold.
Electronic bank transfer fee - £40
If you are swapping lenders, then you may be subject to an electronic bank transfer fee. This ensures that your data is moved from one lender to the other efficiently.
Electronic ID check - £20
This is a verification process to ensure that the person applying for the remortgage is the correct person. This helps to prevent fraud from taking place.
Title deeds copy - £4
Your solicitor may need a copy of the title deeds for the application. This is one of the smaller costs in the solicitor fees.
Land Registry fees - £4
Similar to the title deeds copy, your solicitor may also need to verify your property ownership with Land Registry. This is another small cost.
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Remortgage Costs for Leaving your Current Deal
The average cost for leaving your current deal is £175 plus between 1-5% of your property value. You may face fees for leaving your current deal. A general rule of thumb is that the longer you have left on your contract, the higher your fee will be. However, the total amount that you will have to pay is dependent on various factors. These include the type of mortgage you have and how much you have left to pay.
Here are the costs you need to keep in mind when leaving your current deal:
Early Repayment Charge (ERP) - 1-5% of property value
If you leave your current deal before it ends, you may have to pay an early repayment charge, known as an ERP. Most lenders will charge between 1 and 5% of the property value.
Deed release fee - £175
The deed release fee is an administration fee that is charged by the mortgage lender. This covered the legal costs that come with returning the title deeds to you. On average, a deed release fee will cost around £175.
Remortgage Costs for Getting your New Deal
The average cost of getting a new mortgage deal is £2,150. This is because there are numerous hefty fees that add up. Therefore, it's best to make sure you do your sums before going ahead with your remortgage.
Here are the costs associated with getting your new deal:
Arrangement fee - £1,000
The arrangement fee, also known as a product fee, is an administration charge. When paid, it will lock in the new deal, so your new lender can begin proceedings. The arrangement fee is one of the larger costs. However, be wary of fees that are less than £1,000 as these are likely to come with deals that have high-interest rates.
Valuation fee - £770
Your lender may request that a mortgage valuation is carried out. This is to check the value of the property against the value of your mortgage. It is a basic inspection and will let lenders know whether your property is a secure asset to lend the money.
Broker fee - £200
The broker fee is a commission that your mortgage broker will receive for their services. If they carry out more services or your case is more difficult, such as dealing with leasehold properties, this cost may increase.
Booking fee - £180
The booking fee is seen as a reservation fee. It secures your loan, while your application is being processed. Most lenders will not refund the booking fee if you choose not to go ahead with the remortgage. Therefore, always check the lender's terms and conditions.
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Stamp Duty and Remortgaging
Stamp Duty is a tax that is paid when purchasing a new home worth over £250,000 in England and Northern Ireland, £225,000 in Wales, and £175,000 in Scotland.
Unless you are transferring the legal title of the property as part of your remortgaging plan, you will not have to pay stamp duty.
Additional Remortgage Costs
There may be additional remortgage costs, especially if you are remortgaging a leasehold property.
Transfer of equity - £570 inc VAT
Transfer of equity means that the title deed has been altered by removing or adding parties from the deed. One of the original owners must remain on the deed. The total amount that you will pay for a transfer of equity is dependent on how much is left on your mortgage and the period left in your current deal.
Just as with legal fees, make sure to check whether the quote you receive includes VAT or not. This
Unregistered land - £180
Unregistered land refers to a property that has not been registered with Land Registry. If this is the case, you will need to present evidence through title deeds and documents and register the property.
Landlord's registration - £100
If you wish to become a landlord, you will need to pay the landlord's registration fee. This fee will cover the application process and is made up of a property fee and a principal fee.
Management company notice fees - £300
A management company notice fee is used to notify new ownership of the property. It is also applied to those swapping mortgage lenders. The total amount you will pay will differ depending on your lender.
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Is It Cheaper to Remortgage with Same Lender?
There are pros and cons that come with remortgaging with the same lender. Swapping lenders can incur high costs, especially if you switch before your current deal ends. However, if you decide to stay with your existing lender, you may not be subject to high fees.
Some people stay with their existing lender for a multitude of reasons. It can be more convenient as it doesn't require as much paperwork. However, it may be the best option for those with a lower credit score. Whatever the reason, there are some advantages that come with staying with your current lender with various options available to you.
You can choose to complete your current mortgage deal and then pay the standard variable rate, known as the SVR. This shouldn't incur any fees, but the SVR rate tends to be quite high, depending on which lender you are with.
You can also decide to swap to a different type of mortgage with your current lender. For example, you can change a residential mortgage to a buy-to-let mortgage. If you do this, you may be subject to paying a product transfer fee. Product transfer fees tend to be cheaper than the fees paid to swap lenders entirely. Bear in mind that moving your mortgage to another lender is not guaranteed to result in lower interest rates.
The disadvantage to remortgaging with the same lender is that you are not guaranteed to find low-interest rates.
How Long Does Remortgaging Take?
The remortgaging process takes between 4 to 8 weeks on average. This is longer than applying for an initial mortgage, which takes an average of 18 to 40 days. This is because a new mortgage application will require more evidence and documentation when remortgaging. The length of time remortgaging will take depends on what type of mortgage you have and whether you wish to swap lenders among other factors.
