Mortgage fee types explained: what each charge means

This page covers what each fee type means, and paying upfront vs adding to the loan. For typical remortgage costs and ranges and the costs hub, see the linked pages.

This page names the fee types you will see on UK mortgage paperwork, whether the loan is a purchase or a remortgage. It is a glossary of charges, not the remortgage bill. Indicative ranges, legal-cost bands and the switching inventory live on remortgage fees. Last checked: 11 October 2026. The illustration is the amount that applies to you.

A fee is not the interest rate and not an early repayment charge. Interest is the cost of borrowing. An ERC is the cost of leaving a deal early. A fee is a stated charge for a service or a product: arrangement, valuation, legal work, broking, or closing an account. Cashback is money the lender pays you. It reduces the net fee. It is not a negative interest rate.

The same word can appear on a house purchase and on a remortgage and still mean a different bill. Purchase legal work includes searches and transfer of title. Remortgage legal work is often a lighter pack, sometimes paid by the lender. This page keeps the shared meanings. It does not rebuild the remortgage stack or the product-transfer comparison.

Defining the charges, not totalling them

This page defines the charges; it does not total them. The fees-first checklist and typical remortgage ranges are on remortgage fees, with independent context from MoneyHelper and UK Finance. Put each line from your own paperwork into the remortgage true cost calculator.

Common fee types

• Product / arrangement / booking fee: charged by the lender for the deal. Often around £999–£1,499 on fee-bearing products; sometimes £0 on “fee-free” deals that carry a higher rate. In our EXAMPLE switch path the product fee is £999.
• Valuation fee: for the lender’s valuation. Many remortgage products include a free valuation; complex or high-value cases can still attract a charge.
• Legal / solicitor / conveyancing: remortgage conveyancing packs are common. Leasehold, shared ownership or title issues cost more. Our EXAMPLE legal line is £500.
• Broker fee: may be paid by you, by the lender (procuration fee), or a mix. Ask for a written breakdown. Add any client-paid broker fee as its own line so it competes fairly with direct applications — see broker vs direct.
• Exit / discharge / admin fee: charged by the current lender on full redemption. Separate from any early repayment charge (ERC).
• Higher lending charge: uncommon on modern mainstream residential deals but still appears in older paperwork and some specialist cases — check the illustration.
• Cashback: reduces net cost. May have clawback if you leave early. EXAMPLE remortgage cashback on this site: £250.

Early repayment charges are not “fees” in the product-fee sense, but they dominate many early-exit comparisons. A 2% ERC on the EXAMPLE £185,000 balance is £3,700. See how ERCs are calculated and the ERC costs page.

Where the worked comparison lives

A lower rate with a large product fee can cost more than a slightly higher rate with a small fee over a short fix. The two-column EXAMPLE that shows that — interest totals, net fees, and the early-exit case — is on product transfer vs remortgage EXAMPLE, not repeated here. Cashback vs lower fee is the page for when cashback loses after fees. Use those pages for the sums. Use this page to know which line on the illustration you are looking at.

Paying fees upfront versus adding them to the loan

Paying a product fee in cash keeps the balance lower. Adding it to the loan spreads the cost into monthly repayments and into interest over the remaining term. Neither choice is “always better”. Over a short comparison horizon the cash outlay dominates; over a long remaining term the interest on an added fee grows. Use the true-cost calculator’s fee toggle with your own numbers rather than a rule of thumb.

On the EXAMPLE house at EXAMPLE 4.14% over 22 years, adding the £999 product fee makes the loan £185,999 and the payment about £1,074.57 instead of £1,068.80. Over 24 months that is about £80 more interest, with about £941 of the fee still owed at the end. Over the full term it is about £525 more interest, so the £999 fee costs about £1,524 in total. Counting the fee whether paid or still owed, the 24-month net true cost is about £4,847 with the fee added versus about £4,767 paid upfront. The full side-by-side, and what the calculator shows in each mode, is in what the true cost number means.

Fee-free products and what “£0 fee” hides

A product advertised as fee-free usually means no product or arrangement fee. Valuation and legal costs may still apply, or they may be packaged as “free” with eligibility rules. Exit fees on the old loan and any ERC are separate. A fee-free deal with a higher rate can still win over a low-rate deal with a £1,499 product fee on a short horizon — or lose on a longer one. Run both with the same balance and term rather than assuming the label settles it.

Three EXAMPLE quotes, including a “£0 fee” deal that ends up dearer once valuation, legal and broker lines are added, are compared on remortgage fees.

Sources and further reading

We write in our own words. See MoneyHelper on remortgaging, the FCA’s consumer mortgages pages, and UK Finance insight. Those pages explain process and protections. They are not a substitute for your offer wording.

Disclaimer

Illustrative only: not personalised advice, not a mortgage offer and not an FCA-regulated recommendation. Your offer and ESIS set the real ERC, fees and terms.

Next steps

List every fee line from your paperwork, enter them in the true cost calculator, and read remortgage fees explained for remortgage-specific ranges. Remortgage Lab shows the arithmetic; you decide what to do with it.