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Initial mortgage costs

Whether you're buying a new property, moving your current mortgage to us from another lender, or borrowing more money, it’s important to know how much it’s all going to cost.

We usually expect you to be able to put down a deposit but there will be other costs too, especially if you're moving home. You need to think about whether you can afford all these costs.

Deposit

We'll only lend you a percentage of what the property is worth, so you'll need to put down some of your own money towards the cost of the property. We call this a deposit. Your deposit should be at least 5% of the property’s value. If you can put down more than 5%, you can often get a lower initial interest rate.

Other costs

There are other costs to consider when buying a property and taking out a mortgage. Here are some typical ones that apply to most buyers.

Costs of buying a property

Cost

Summary

Cost

Valuation of property

Summary

Your mortgage adviser will discuss valuation schemes and fees with you when you make your full application. The fee depends on the property value and the type of valuation you select.

Cost

Conveyancing fees

Summary

Charged by a conveyancer for doing the basic legal work connected with buying your property. Fees can vary and are often based on the purchase price plus other costs.

Cost

Government Land Tax

Summary

This is a government tax charged on land and property transactions in the UK. The tax is charged at different rates depending on the property and the value of the transaction. Government Land Tax is known differently depending on which country you are purchasing a property. For example, in England it's called Stamp Duty.

For the most up to date information, please visit MoneyHelper.

This tax is an expensive extra cost that you should take into account when thinking about buying a property.

Cost

Land Registry fees

Summary

The Land Registry will charge for any searches of the property register the conveyancer asks for. It also charges for registering you as the owner and us as the lender. You must pay both these costs.

Cost

Local authority search fees

Summary

The local authority will charge for answering your conveyancer’s questions about the property you want to buy, such as whether the local authority maintains the roads adjoining the property or whether you'll be responsible for this.

Cost

Other relevant property searches, for example mining or environmental searches

Summary

Sometimes your conveyancer will have to carry out other searches because of where your property is. These may be environmental searches to check if certain industrial processes are carried out in the area. Or if the property is built on land that may have been contaminated because of the way it has been used in the past. Mining searches ask for records of any mining work that may affect the property. The organisations that answer these questions will charge for this, and you'll have to pay these costs.

There are often unexpected costs in buying a property, so it is a good idea to have a reserve fund to cover them.

There could be other charges and standard costs which you may have to pay during the course of setting up your mortgage.

You could lose your property if you don't keep up your mortgage repayments