How much does a mortgage cost?

The amount you have to pay each month and in total over the life of your mortgage depends on the deal you get and the cost of the property.

Here are the costs of a mortgage explained in detail and how to work out if you can afford one. The main costs are:

Interest 

The interest rate will affect how much you have to repay overall and what you pay each month.

It is accrued across the lifetime of the mortgage and is charged as a percentage rate on the amount you owe.

For example, if you took out a £200,000 mortgage with an interest of 4% over 25 years, you could pay interest of £116,702 and repay a total of £316,702.

The mortgage in the above example could cost around:

• £1,056 per month with an interest rate of 4%
• £1,289 per month at 5%

You can work out how much interest would cost on a mortgage for the amount you need. Many lenders websites show you the amount you would have to pay each month, the total interest amount and an illustration of how much of the balance you would pay off each year.

Mortgage fees

Product fees may apply when taking out a mortgage.

• Application fees may be charged when you apply for a mortgage, regardless of whether you take it out.
• Valuation fees may be charged by your lender to assess the property value.
• Higher lending charges may apply if you have a smaller deposit.
• CHAPS transfer fees may be charged when your lender transfers funds (usually to your solicitor).
• Broker fees may apply if you use a mortgage recommended by a broker. Some mortgage providers may offer advice without a fee.

Fees may also apply on your existing mortgage:

• Early repayment charges may apply if you pay off your mortgage early or terminate the agreement before the end of the agreed term, for example if you sell your property.
• Exit fees may be charged when moving to a new lender.