Residential mortgages

What fees you can expect to pay

It is important to understand the variety of fees that are incurred when applying for a mortgage or remortgage. Knowing what you are going to have to shell out and when will help you to make the right choice. Here’s a list of what you can expect to pay.

Broker Fee

It takes a lot of time and understanding to ensure a mortgage application is processed efficiently and effectively, that’s why most mortgage brokers charge a fee.

On average brokers charge around £500 to advise and arrange a mortgage. Remember, at Mortgages for Business initial advice is free and without obligation, so do call us on 0345 345 6788 to talk through the options. When it comes to paying us, we work on a success-only basis and give you fee choices:

1. Standard broker fee £497
You only pay this if we are able to get you an acceptable, formal mortgage offer from the lender. This means submitting a full mortgage application to the lender and paying for a valuation on the property. In this instance, we keep any commission payments made by the lender.

2. Reduced broker fee £297
If you are fairly confident that you will get a mortgage, this non-refundable option is payable if we are able to get you an Agreement In Principle (AIP) or Decision In Principle (DIP) from the lender. An AIP/DIP is a statement from a lender to say that “in principle” they would lend you a certain amount based on some basic information provided by you. Here a mortgage application is not submitted to the lender and neither is a valuation carried out on the property. Like the standard broker fee option, we keep any commission payments made by the lender.

3. Fee based on a percentage of the loan amount
We charge you typically 1% of the total loan amount, although the exact percentage will depend upon the size and complexity of the mortgage application. We also rebate to you any commission payment to us made by the lender.

Never be afraid to discuss fees with a mortgage broker. We have a duty to be transparent, so if there is anything you don’t understand, please ask. All mortgage advisers have to provide a detailed Key Facts Illustration of any mortgage you are interested in. A KFI is a standardised document which makes it easy to compare like for like and includes a full breakdown of all the costs involved.

Lender Arrangement Fee

This is the fee that the lender charges for arranging the mortgage. It is payable by the borrower to the mortgage lender at or before completion of the mortgage. This can often be added to the loan. Arrangement fees are usually a fixed amount but can be set as a percentage of the loan amount. Do keep in mind that generally, interest is charged on the arrangement fee if it is added to the loan. Sometimes, some lenders offer rates with no arrangement fees. Do ask one of our mortgage brokers for more details if this is of interest.

Application Fee

This is payable to Mortgages for Business who, in turn, pay the surveyor for the actual property valuation which is required by the mortgage lender. Please note that a copy of this valuation is normally only sent to the mortgage lender. The application fee must be paid before the valuation can be instructed.

Booking Fee

Some lenders charge a booking fee for securing a particular mortgage rate. This fee is usually found on fixed rate mortgages. The booking fee must be paid upon submission of the mortgage application.

Legal Fees

Mortgage lenders normally use the same solicitor as the customer (the practice must have two or more partners). All legal fees are payable by the borrower, as and when required by the solicitors. However, many residential remortgage deals offer free legal work if a solicitor chosen by the lender is used. If you do not have a solicitor, do ask for a recommendation.


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