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Mortgages · 8 minute read

Mortgage fees and APRC, without the fog.

The lowest advertised rate is not necessarily the lowest-cost mortgage. Compare every unavoidable charge over the same period.

The short answer

Mortgage costs can include booking, arrangement or product, valuation, account, legal and broker fees, plus exit or early repayment charges later. APRC expresses an illustrated annual cost including interest and relevant charges, normally assuming you keep the mortgage for its full term. It is useful, but it may not match the cost over the two or five years you actually expect to keep an introductory deal.

Common mortgage charges

  • Booking or application fee: may reserve a product and may be non-refundable.
  • Arrangement or product fee: often the largest lender charge; check whether it is paid upfront or added to the loan.
  • Valuation fee: pays for the lender’s assessment of its security, not a condition survey for you.
  • Legal or transfer fee: can apply on purchases or remortgages; “free legals” may use the lender’s nominated service with a defined scope.
  • Broker fee: separate from any commission the lender pays; the adviser must explain charges and service limitations.
  • Exit and early repayment charges: can apply when repaying or switching, particularly during an initial deal.

Adding a fee to the mortgage still costs money

If a £1,500 product fee is added to the balance, you borrow £1,500 more and pay interest on it until it is repaid. Adding the fee can protect cash if the purchase fails before completion, depending on the product terms, but it is not free.

What APRC does—and does not—tell you

APRC is designed to combine the borrowing rate and relevant charges into one annual percentage for comparison. For a mortgage with a short fixed rate followed by a higher reversion rate, the calculation may assume many years on that reversion rate. If you expect to switch, also compare the cash cost during your intended ownership or deal period, including fees and the balance remaining.

Worked comparison

Deal A charges £1,500 upfront and Deal B charges no product fee. If Deal A saves £35 a month, it takes about 43 months to recover the fee before considering interest on a fee added to the loan or differences in the outstanding balance. A two-year borrower would pay £840 less in monthly payments but remain £660 behind on the simple fee comparison.

A fair comparison checklist

  1. Use the same loan, term and repayment method.
  2. Include every fee and incentive.
  3. Compare payments and remaining balance over the same period.
  4. Check what happens after the initial rate.
  5. Read early repayment and overpayment terms.
  6. Confirm which charges are refundable if the transaction fails.

Use the mortgage calculator for payment scenarios and the remortgage break-even calculator for switching costs.

Sources and limitations

See MoneyHelper’s mortgage fees and moving costs guide and mortgage application guidance. Fees and disclosure treatment vary by product. This is information, not a recommendation. Send corrections to hello@propertiesandhomes.co.uk.

Reviewed by the Properties & Homes editorial team
Published and last reviewed: 14 August 2026.
Change log: first edition.