Re-mortgages - what are the costs?

Aside from any penalties that you may or may not incur, you will almost certainly still be required to pay a small redemption fee to pay off your existing mortgage before the end of its set term.

The big saving in fees and costs that you make when comparing re-mortgaging against moving is that there is no stamp duty to pay since you are not actually purchasing a new property. However, other than that, you will face charges that are broadly those you would have faced when you first arranged a mortgage.

The likely fees and charges that you need to take account of are:

• Your lender's booking/arrangement fee
• A valuation fee
• Solicitors' conveyancing fees
• A Higher Lending Charge may be payable

Taking out a new mortgage may involve a 'booking' fee usually of around £250-550 depending on the lender and the size of the mortgage and type of product. It is unlikely that your lender (even your existing lender) would be willing to accept the original valuation report from when you purchased the property - even if it was a recent purchase - especially if you are extending your mortgage. However, if you previously had a full structural or homebuyer survey carried out, the lender may not require such a detailed report again.

You may need to appoint a solicitor to conduct the legal work. You may be able to avoid doing so if you are staying with the same lender or where your new lender is prepared to pick up the tab for the legal bill. If not, bear in mind that the solicitors' fees are likely to be lower than those charged for moving house as the work involved is much simpler.

If you are borrowing a high loan-to-value ratio, that is to say if the amount you want to borrow is more than a certain percentage of the value of your property, you may be required to pay a Higher Lending Charge (HLC).