SIPP Mortgage Fees Explained: Every Cost You Need to Know

The lender's fees are typically the largest component of SIPP mortgage transaction costs. They include:

• Arrangement fee — the most significant lender fee, typically 1–2% of the gross loan amount. On a £300,000 loan, this equates to £3,000–£6,000. Some lenders charge a flat fee rather than a percentage, particularly for smaller loans
• Valuation fee — the lender commissions their own RICS valuation of the property as part of underwriting. For a £500,000 commercial property, expect £800–£1,500. This is separate from any valuation commissioned by the SIPP provider
• Legal fees (lender's solicitors) — the lender appoints its own solicitors to review title, prepare the mortgage deed, and register the charge. Typically £1,000–£2,500 depending on property complexity
• Exit fee — some lenders charge a fee on redemption (typically 1% of the outstanding loan). Not universal — check at application stage
• Early repayment charges (ERCs) — where a fixed rate product is redeemed early, ERCs typically range from 1–5% of the outstanding loan depending on how much of the fixed term remains

A specialist SIPP mortgage broker charges for arranging the finance. Our fees are agreed upfront and transparent. Typical structures include:

• Procurement fee — charged by the broker on completion, typically 1–1.5% of the loan amount or a negotiated flat fee for larger transactions
• Lender procuration fee — separately, lenders pay brokers a procuration fee for introduced business. This does not increase the cost to the borrower but does incentivise brokers to use certain lenders, which is why transparency about commission is important

Working with a specialist broker costs money, but a well-brokered deal — accessing lenders not available direct, negotiating rate and fee, managing the process — typically delivers savings that dwarf the broker fee many times over.

The SIPP provider charges fees in their capacity as trustee for approving and processing the mortgage transaction:

• Mortgage approval fee — for reviewing and approving the mortgage in their trustee role, typically £300–£800
• Annual mortgage review fee — some providers charge an annual fee for monitoring the mortgage, typically £100–£300 per year
• Trustee solicitor fees — the SIPP provider's solicitors may charge for reviewing mortgage documentation, typically £500–£1,000

Pulling these together, for a typical SIPP mortgage of £300,000 on a £500,000 commercial property purchase, total mortgage transaction fees are likely to be:

• Arrangement fee (1.5%): £4,500
• Lender valuation: £1,200
• Lender legal fees: £1,500
• Broker fee (1%): £3,000
• SIPP provider mortgage fee: £500
• Total: approximately £10,700

Note that this is in addition to the property purchase costs (SIPP provider acquisition fee, solicitor conveyancing fees, SDLT) covered in our guide on SIPP setup costs for property. On an ongoing basis, the primary ongoing costs are the interest payments and the SIPP's annual administration fee. Use our SIPP Mortgage Calculator to model the interest cost component across different loan sizes, rates, and terms.