Contact Us

General Costs & Fees

When securing a mortgage in the UK, there are several costs to consider in addition to the property's purchase price. Having a clear understanding of these costs is crucial for prospective buyers to plan their finances effectively and ensure a successful property purchase. Here are the key expenses associated with mortgages in the UK:

  • Deposit: The deposit is the initial amount paid by the buyer towards the property's purchase price. Typically a percentage of the property's value, a higher deposit often unlocks more favorable mortgage deals. Standard deposits usually range from 5% to 20% of the property's value, though larger deposits can result in better interest rates and lower monthly repayments.

  • Legal Fees: Conveyancing solicitors oversee the legal aspects of the property purchase, including property searches, contract preparation, and transfer of ownership. Legal fees can vary depending on the solicitor and the property's complexity, generally ranging from £500 to £1,500.

  • Stamp Duty: Stamp Duty Land Tax (SDLT) is a tax applied to property purchases exceeding a specific threshold in England and Northern Ireland. The threshold and tax rates are determined by the property's purchase price, and first-time buyers may qualify for reduced rates. Stamp duty rates can range from 0% to 12% of the property's value, depending on the purchase price.

  • Additional Rate Stamp Duty: This is an additional stamp duty that applies to the purchase of additional residential properties, such as second homes or buy-to-let properties. The rates for additional rate stamp duty are higher than standard stamp duty rates.

  • Residential Leases: If the property is leasehold rather than freehold, there may be costs associated with extending the lease or ground rent charges.

  • Survey Fees (RICS): A property survey, such as a RICS HomeBuyer Report or Building Survey, provides an assessment of the property's condition and any potential issues. Survey fees can range from £350 to £1,500, depending on the type of survey and the property's size and complexity.

  • Lenders Fees: Some lenders charge arrangement or booking fees for setting up the mortgage. These fees can vary and may be paid upfront or added to the mortgage amount.

  • Higher Lending Charge: This charge may apply if the buyer has a smaller deposit, typically less than 10% of the property's value. The higher lending charge provides additional insurance to the lender against the risk of low deposit loans.

  • Buildings and Contents Insurance: Lenders typically require buyers to have buildings insurance to protect the property's structure and contents insurance to cover personal belongings. The cost of insurance depends on the property's value and the level of coverage required.

  • Local Authority Search Fees: As part of the conveyancing process, local authority searches are conducted to check for any planning or local issues that may affect the property. These searches incur a fee.

  • Land Registry Fees: The Land Registry charges a fee for registering the property's ownership and mortgage details. The cost is based on the property's value and is payable by the buyer.

Having a comprehensive understanding of these costs enables buyers to budget effectively and make informed decisions throughout the property purchase and mortgage application process. Seeking advice from mortgage advisors and conveyancing solicitors can provide buyers with professional guidance and ensure a smooth and successful home buying journey.

A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.