Updated: Nov 23
Purchasing a new home can be both an exciting but often overwhelming journey, so it’s important to be aware of all costs associated with the process. There are a number of fees that you need to budget for – mortgage broker fees (if applicable), solicitor’s fees, land registry charges, local searches and stamp duty, to surveyor and mortgage lender fees – it all adds up! Knowing what payments you have to make and when can help keep your house buying experience on track as well as preventing any unwelcome surprises further down the line. However, calculating these amounts is far from straightforward. Fear not though – this article aims to educate you on what fees you will pay and when – saving you time, effort and potentially any last minute worries!
While some brokers are content with the fee they receive from the lender, others may increase your costs. That's why it's crucial to do your homework and review a broker's fee structure before committing. Watch out for upfront fees and potential additional charges further down the line.
For more detailed information, visit our broker fees page.
Mortgage / Lender Fees:
Lenders will charge an Arrangement Fee and this is typically around £995. This fee can be paid separately or added to your loan, but please note that adding it to your loan will result in additional interest charges.
Additionally, your chosen lender may charge an admin or valuation fee upfront.
Lenders will often have deals with no fees to pay, however this will usually be at the expense of a higher interest rate so may not be the best deal for you.
When purchasing a property you will need to engage with a solicitor, also known as a conveyancer, for assistance. It is advisable to compare options and seek recommendations, maybe from your mortgage broker and the estate agent selling the property.
The professional fees for buying a property can vary among solicitors. However, you should budget around £1200-1500 for the purchase process (and an additional £1,000 if you are selling your current home). This includes fees for Local Searches and Land Registry. Keep in mind that purchasing a leasehold property requires additional work, so the fee may be higher.
It is worth inquiring if your solicitor offers a 'No Sale No Fee' service.
Unless you are a First Time Buyer, you will also need to pay Stamp Duty upon completion. For up-to-date rates and costs, you can click here.
When it comes to assessing a property, factors such as the type, age, and overall condition are important considerations. Depending on these factors, you may find it necessary to arrange for a detailed survey. While some lenders offer the option to upgrade their valuation, it's important to remember that this valuation is primarily for their benefit, not yours. While upgrading with your lender may be the most cost-effective option, it is generally advisable to seek an independent survey in order to have more choice and minimise your immediate costs. Seeking approval from your lender with minimal initial expense is often seen as a sensible approach.
Once your mortgage has been officially approved and mortgage offered to you in writing, you can engage with a local surveyor of your choosing. Expect to pay approximately £500 to £800 for a Homebuyers Report, while a full Buildings Survey can cost upwards of £800, depending on factors such as the property's size, location, and value. Visit our Should I Arrange A Survey page for more information.
You will decide how much you are putting down as a deposit at the start of the process, as this forms part of your initial discussions with your mortgage broker or bank, if that is your chosen route. However, your deposit will not be payable until your solicitor is in the process of organising Exchange of Contracts. Although timings vary from one purchase to the next, as a general rule of thumb purchasing a property is likely to take around 8 to 12 weeks to complete.
In most instances you will need to place a deposit of at least 5% of the purchase price - so £10,000 if you are buying a £200,000 property.
As you can see, purchasing a property is never without various cost considerations. With proper foresight and assistance from a mortgage broker, you can protect yourself against any surprise costs popping up at the last minute. Proper planning today could save unexpected expenses tomorrow.
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