Mortgage Arrangement Fee
A collective term for what the lender decides it can
get away with charging for doing the paperwork and it comes in many
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quote and help and advice - from a mortgage broker
regulated by the Financial Conduct Authority
Lenders used to charge relatively small arrangement
fees, as to do otherwise might lead a borrower to look elsewhere for a
However, today the lenders are charging massive
arrangement fees in an attempt to stop borrowers from jumping from one
lender to another and ruining the stability of the lenders "mortgage
book" or simply to make up for the lower profit gained from offering a
headline grabbing low initial interest rate to get the borrower on
An advert displaying an incredibly low interest rate
is bound to catch a borrowers eye, whereas an alternative one showing
a higher interest rate (but a lower arrangement fee) may not.
Often the arrangement fees will be hidden in the
small print unlike the headline interest rate that will be splashed in
If the mortgage deal does not have an arrangement
fee (and they do exist) then it will be compensated for by a higher
The lender has to make its profit and keep the
shareholders happy somehow!
Finally - if an arrangement fee is not showing on
the printed page, then perhaps it is simply in a different guise, such
as application fee, reservation fee, booking fee, additional survey
fee, initial fee etc, etc.
No information on this website is intended to constitute advice.
This site contains a summary of the information relating to the
products and is not intended to promote any specific mortgage or
insurance product or provide mortgage or insurance advice. It is for
information purposes only.