Costs and fees: A guide when getting a mortgage in the UK in 2024

Owning a home is a milestone in one’s life. And this is a cherished dream for many in the UK. How you go about purchasing your property may differ from person to person, however many prospective buyers prefer the option of taking on a long or short term mortgage. While mortgaging takes away the pressure of investing a significant amount at the onset, there are also some costs that you should be aware of.

This blog post looks at these costs associated with obtaining a mortgage in the UK. We hope it will make your journey a bit more informed and insightful before the mortgage process begins.

What are the costs?
Deposit For The Mortgage

When embarking on any mortgage, you will be required to make a deposit. In the UK, this typically ranges between 5% to 25% of the property's total purchase price. The higher the deposit, the lower the loan amount you will need to borrow. This will benefit you in the long term by reducing your borrowing costs.

The Arrangement Fee

This fee is the fee you pay the lender as the completion fee for the mortgage you are getting. You may opt to pay this as a separate amount or even add it to the mortgage to be deducted along with your monthly instalments. You should also check with your lender if this fee is refundable in the event of your mortgage application being rejected.

The arrangement fee will vary according to the value of your property. The usual fee may cost anything between £500 and £1,500. But business-oriented mortgages such as buy-to-let may have higher charges tied to them than residential mortgage deals. Lenders usually charge a percentage of the total property value when it comes to buy-to-let mortgages.

Application Fee

This is a one-time fee charged by the lender for assessing your financial situation and processing your mortgage application. This is a non-refundable amount and would typically cost anything between £100 to £200. This fee can be added as part of your arrangement fee to be deducted later when paying off your monthly instalments.

Valuation Fee

This is probably one of the most important costs you may have to incur when obtaining a mortgage. The valuation of the property determines the actual value of your property to which a lender will release the money for. As in any deal, your property value should be able to cover the total you have borrowed in the event of you being unable to pay off the mortgage due to unforeseen circumstances. While some lenders may ask you to pay this fee prior to the valuation being carried out, some may not charge at all. This may depend on the policies of the lender and how they operate. The valuation fee could range between £500 and £1,500.

Mortgage Broker Fee

Paying a mortgage broker can be considered as an investment. A mortgage broker with expert level experience have great deals that can optimize your mortgage. Getting the services of a broker or a mortgage adviser can prove to be extremely beneficial. A broker can provide you with invaluable insight that could ultimately lead to a rewarding deal closure. 

While all brokers may not have an upfront charge or cost involved, they usually are paid a commission for the brokering service they do. If you are on the lookout for an expert level and experienced mortgage adviser, look no further than BVS Mortgages and Financial Services, our brokers will help you get the most out of your mortgage.

Government Fees

Last, but by no means least, Stamp Duty and Land Tax is a fee that you are required to pay the government when purchasing a property.

Stamp Duty Land Tax (SDLT):  This is a tax levied on property purchases that are valued over £250,000. If you are a first-time buyer, you are liable to pay SDLT if the property is over £425,000. If your property is a business-oriented entity, your tax rate could be higher.  While exceptions and discounts may apply in certain instances, this will depend on your particular circumstance as suggested above.

Additional Considerations

In addition to the above, you may consider these as options when getting a mortgage.

Mortgage Insurance: Some lenders may require you to take out mortgage insurance, which protects them in case you default on the loan.

Income protection: Income protection provides you the means of meeting your monthly expenses in the event of a sudden injury or medical condition. Income protection policies will carry monthly payouts until you are able to resume your normal duties and earn a monthly income by returning to your job.

Life Insurance: While not mandatory, life insurance provides peace of mind by ensuring your mortgage is paid off if you die unexpectedly, protecting your loved ones from financial burdens.

Buildings Insurance: This insurance covers damage to the property structure from unforeseen events like fire, floods, or storms. It's usually a requirement for obtaining a mortgage.


Understanding the financial landscape of mortgages in the UK empowers you to be ready to deal with the related expenses when embarking on your mortgage journey. By studying the essential costs involved and exploring ways to manage them, you can navigate your homeownership journey with greater confidence. Remember, a well-planned approach can translate into significant savings in the long run, allowing you to focus on the development of your new house and property.

Your home may be repossessed if you do not keep up repayments on your mortgage.


* Some Buy to Let mortgages are not regulated by the Financial Conduct Authority.

* Approved by the Openwork Partnership on 08/05/2024"