Why the headline rate is only half the story

The number that catches your eye on a comparison site is rarely the number you end up paying. It's the shop window, not the whole bill. A rate difference of 0.10% on a £200,000 mortgage works out at roughly £11 a month, or about £130 a year. A £999 product fee on a two-year deal wipes that advantage out completely — and leaves you slightly worse off.

That isn't a reason to ignore rates. It's a reason to compare the total cost of the deal rather than the poster price. Remortgaging is one of the few times you can genuinely save four figures a year, so it's worth an hour of careful arithmetic.

Add up the fees before you fall for the rate

Every deal carries its own mix of costs, and they vary enormously between lenders. Build a list for each deal you're considering:

• Arrangement or product fee — often £999 to £1,999, and the very sharpest rates usually sit at the top of that range. If it's added to the loan instead of paid upfront, you pay interest on it too. £999 added to a 25-year term at 4.5% costs around £1,670 in total by the end.
• Booking fee — a few hundred pounds with some lenders, although plenty have scrapped it.
• Valuation fee — usually free on a remortgage, but always check.
• Legal and conveyancing costs — free legals are common on remortgages. If they aren't included, budget £300 to £600.
• Exit or redemption fee — your current lender will typically charge £75 to £300 to close the account.
• Broker fee — some brokers are paid by the lender and charge you nothing, others charge £300 to £500. Ask which model applies before you start.
• Telegraphic transfer fee — usually £25 to £50 to move the money. Small, but it still belongs on the sheet.

Add the fees to the monthly payments over the length of the fixed or discounted period. That single total is the only honest way to compare one deal against another.

Early repayment charges: the real cost of changing your mind

Early repayment charges (ERCs) are where remortgaging quietly becomes expensive. They typically run at 1% to 5% of the amount repaid, often sliding down each year — so 5% in year one, 4% in year two, and so on. On a £180,000 balance, 5% is £9,000. That's a serious number.

The headline ERC matters, but so does its shape and length. A five-year fix with a 5% charge in year one isn't automatically worse than a two-year fix with 3%, but it does mean you're locked in for longer. Be honest with yourself about what the next few years hold: a possible move, a change of job, a growing family, an inheritance, a separation. If any of those are plausible, a shorter tie-in with a gentler charge may be worth a slightly higher rate.

Two more things worth checking: whether the ERC also applies to overpayments above your annual allowance, and whether the deal lets you port the mortgage to a new property without triggering the charge.

Flexibility is worth paying for — but only the kind you'll use

Some deals cost a little more and give you a lot more room to manoeuvre. The features that tend to matter most:

• Overpayment allowance — 10% of the balance each year is the standard, but some lenders offer more, and a few offer unlimited overpayments.
• Porting — carrying the mortgage across to your next home, keeping the rate and avoiding an ERC.
• Payment holidays and underpayment options — useful if your income is irregular or you're planning time off.
• — borrowing more later without a full remortgage, handy for home improvements.
• Offset facilities — linking savings to the mortgage to reduce the interest charged.