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Property Costs

There are a number of costs associated with property purchase. The following list by is by no means definitive and is merely a guide:

• Lender or Arrangement Fee - A fee may be payable by the borrower in order to secure a lender’s specific rate. This normally applies to Fixed Rate products. The fee can be paid in advance, although ordinarily it is added to the loan. Note that if fees are added to a mortgage interest will be payable on the total amount for the duration of mortgage term. It may also be the case that adding fees to a loan could breach a threshold and incur further costs.


• Valuation Fee - The lender will require a Valuation to be carried out by a Surveyor, to ensure that the property offers sufficient security against the loan. The report commissioned will be paid for by the borrower; however, it will not be comprehensive. Structural and other surveys are available.


• Solicitor’s Fee - A solicitor should provide a quotation for legal costs, upon request.


• Stamp Duty - A government tax is levied on the sale of property, which is calculated as a percentage based on the value of a property set in the Chancellor’s annual budget. It is not payable when property is remortgaged. The bandings for the Tax Year 2006 – 2007 are as follows:


• £0 - £125,000, Nil
• £125,001 - £250,000, 1%
• £250,001 - £500,000, 3%
• Over £500,001, 4%