Fees can add up to 2% to the annual cost of a buy to let mortgage

[Nicholas Wallwork]

Lender fees, valuation fees and legal fees add 0.55% on average to an annual buy to let mortgage costs in the UK and can add up to 2%, research shows. The figures from specialist broker Mortgages for Business come at a time when the demand for buy to let loans is rising. The firm says [...]

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[brinkriley]

Lender fees, valuation fees and legal fees add 0.55% on average to an annual buy to let mortgage costs in the UK and can add up to 2%, research shows. The figures from specialist broker Mortgages for Business come at a time when the demand for buy to let loans is rising. The firm says [...]

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[TurnKey Landlords]

Higher fixed fees on a larger mortgage might actually be justified, if it gets you access to highly competitive interest rates.

For instance, using the very basic example of a £200,000, 20 year loan. The overall cost of a fee free mortgage with an APR for comparison of 4.5% is £303,672.00.

The same loan with a better introductory rate, cost for comparison of 3.8% and £1,999.00 fee costs £287,836.60 over 20 years.

For those with higher deposits who intend to remortgage regularly, fees are more important to avoid than for those who want to lock in to repaying an expensive mortgage over the long term.

Of course, if you can avoid fees, you can have more capital for the deposit and hold more equity at the beginning of the mortgage.