Although your mortgage is likely your biggest expense when buying a house, there are other costs that you’ll need to consider. Some of these you might not be aware of, so we’ve provided a list of the additional costs to expect. This will help to avoid any nasty surprises down the line and allow you to budget for these charges.
1. Mortgage fees
On top of the interest you pay, there are also mortgage fees you’ll need to make to your lender. This is the cost for securing and setting up your mortgage, known as a booking and arrangement fee. Before taking out a mortgage you should look at these fees and make sure you can afford them.
Booking fee
A booking fee – also known as an application or reservation fee – is a charge to your lender made to secure your mortgage deal. This charge is non-refundable and you’ll need to pay it upfront when you’ve made your application.
The cost of this is likely to be between £100-£200.
Arrangement fee
The biggest mortgage fee you will have to pay is the arrangement fee. This is the cost of the lender setting up your mortgage. You will usually be given the option to pay this amount in full or to add it onto your mortgage.
This cost can vary but on average, this is somewhere in the region of £1,000-£2,000.
2. Valuation fee
A mortgage valuation is a requirement of the lender to allow them to check whether the property is safe to lend on. They will want to make sure that if you default on the mortgage, they will be able to repossess the property in order to get back any money lost.
On average, valuations cost around £300 – £400 and you will be expected to pay this upfront.
3. Survey fee
A survey is a more thorough version of the valuation and can help you to confirm that the property’s condition is as you expect. Although surveys are optional, they are strongly advised. This is because if you choose not to get a survey and it turns out that there is something wrong with the property, then you won’t have any protection.
You will usually have a survey done when mortgage offer is in place but before the exchange of contracts. It can sometimes be worth asking your lender how much it will cost to upgrade the valuation to a full survey, in theory making the process cheaper.
You will be looking to pay around £400-£700 for a survey depending which type you choose.
4. Legal fees
You will need a solicitor or licensed conveyor to carry out the legal work associated with buying your new home. This is to take care of the conveyancing (the transfer of home ownership) as well as checking paperwork and carrying out legal searches. You can choose your own solicitor but this will need to be agreed on by the lender. These fees will usually need to be paid in instalments through the buying process.
The cost of a solicitor will usually cost in the region of £1,000 – £1,500. However, this could be a lot more depending on the value of your property.
5. Stamp duty
Stamp duty land tax (SDLT) is the tax that you pay to the government for buying a property in the UK which has a value of more than £125,000. The percentage of tax you pay depends on the property value. You will only pay stamp duty on that portion of the purchase price.
| Purchase price | Stamp duty rate |
| Up to £125,000 | Zero |
| £125,000.01 to £250,000 | 2% |
| £250,000.01 to £925,000 | 5% |
| £925,000.01 to £1,500,000 | 10% |
| £1,500,000.01+ | 12% |
Although it’s your responsibility to pay the stamp duty tax, your solicitor will likely organise this payment for you.
6. Land registry fee
The Land Registry charges a fee to register your property in your name. The fee calculator on the Land Registry website can help you to work out exactly how much you will pay for this. Again, your solicitor will usually help to arrange this payment on your behalf.
This fee is dependent on the value of your property but is likely to be somewhere between £200 to £500.
