What fees should I expect when selling a house with a mortgage?
When selling a house with a mortgage, you may need to pay an early repayment charge, solicitor’s conveyancing fees, estate agency fees and mortgage administration or discharge costs. Your lender’s redemption statement will confirm the amount needed to clear the mortgage, including any interest or charges due on completion.
In addition to repaying the mortgage itself, selling a mortgaged property can involve valuation, documentation, leasehold, tax and financial-advice costs. The exact total depends on your lender, the property’s tenure, the condition of the title and whether any specialist work is required before completion.
Mortgage balance versus selling costs
The outstanding mortgage balance is not a selling fee. It is the capital and interest that must be settled from the sale proceeds. Ask your lender for a current redemption statement and check its expiry date, because the amount required can change as interest accrues or payments are made. If the sale price is lower than the amount needed to clear the mortgage and other secured debts, you may need to provide additional funds or obtain the lender’s agreement to the sale.
Property valuation and inspection costs
A lender, buyer or specialist adviser may require a valuation or inspection. In some transactions the buyer arranges and pays for their own survey, but you could still incur a cost if an independent valuation is needed to establish market value, support a mortgage decision or assess a complicated property. These costs should be confirmed before instructing a valuer.
Energy Performance Certificate
A property generally needs a valid Energy Performance Certificate when marketed, unless an exemption applies. If the certificate has expired or the property does not have one, arranging an assessment can create an additional cost. Check whether an existing certificate is still valid before ordering another.
Leasehold and managing-agent charges
Leasehold sellers may face charges for information held by the freeholder or managing agent. These can include a management pack, replies to standard enquiries, an account statement, a notice of transfer or a notice of charge. The lease may also require the seller to settle service-charge or ground-rent arrears before the transaction can proceed. Request the fee schedule early, as the amounts and processing arrangements are set by the relevant freeholder or agent.
Title, document and specialist-work costs
Problems with the title, missing documents, boundary discrepancies, absent planning permissions or alterations without the correct certificates can require extra work. Possible costs include obtaining copies of documents, correcting the title, arranging a deed of variation or purchasing an indemnity policy where appropriate. These options are not interchangeable, so obtain professional advice before choosing one.
Mortgage broker and financial-advice fees
If you use a mortgage broker or financial adviser to arrange replacement borrowing, port an existing product or review your next mortgage, their fee structure should be explained before you proceed. Some advisers charge directly, while others may receive commission or use a combination of charges. Confirm whether any fee remains payable if the sale or onward purchase does not complete.
Arrears and secured-debt consequences
Where mortgage payments or other secured borrowing are overdue, the lender may add arrears-related interest, collection charges or legal costs. These amounts should appear in the lender’s settlement information or be confirmed directly. Do not assume that the sale price will automatically cover every debt secured against the property; ask for an up-to-date figure for each charge.
Tax considerations
There may be tax implications if the property is not fully covered by main-residence relief, for example where it has been let, used partly for business or owned as an investment. Tax treatment depends on personal circumstances and the ownership history. A qualified tax adviser can explain whether any capital gains reporting or payment is required. Tax is separate from the transaction costs shown on a completion statement.
Other practical expenses
- removal and storage costs;
- repairs or clearance agreed with the buyer;
- secure document delivery or bank-transfer charges;
- additional identification, translation or certification costs in unusual cases; and
- costs arising if the sale is delayed, changes or fails to complete, depending on the terms of the professionals involved.
How to establish the total
- Request the lender’s current redemption figure and ask which secured debts or charges are included.
- Check whether the property has a valid Energy Performance Certificate.
- Ask whether the property is leasehold and obtain the freeholder’s or managing agent’s fee schedule.
- Ask your conveyancer for an itemised estimate that separates standard work from likely additional charges.
- Confirm any broker, adviser, valuation, inspection, document or specialist-policy costs in writing.
- Compare the estimated total with the expected sale proceeds, allowing for changes before completion.
The completion statement should show how the sale proceeds are allocated, including repayment of secured borrowing and agreed transaction costs. Reviewing it promptly can identify a shortfall or unexpected charge before completion rather than when funds are being transferred.
An early repayment charge (ERC) is usually determined by the terms of your mortgage product rather than by the sale itself. It may apply when the mortgage is repaid before a fixed, discounted or tracker period ends, although the lender’s conditions will decide whether any exemption or permitted overpayment allowance applies. Moving home does not automatically remove the charge.
Before accepting an offer, ask the lender for written confirmation of the ERC, any separate mortgage exit fee and the date on which the charge reduces or ends. Check whether the figure applies on the anticipated completion date, as a change in timing can alter the amount shown on the redemption statement.