A mortgage arrangement fee is a fee that is charged by a lender to cover the administrative costs of setting up a mortgage. The fee is typically payable when the mortgage is taken out and is usually added to the overall mortgage loan, so that the borrower repays it along with the principal and interest.
Mortgage arrangement fees can vary significantly between lenders and will depend on the type of mortgage being taken out. The fee may be a fixed amount or a percentage of the mortgage loan.
Some lenders may offer a mortgage with no arrangement fee, but these mortgages may have a higher interest rate to compensate for the absence of the fee. It is important for borrowers to carefully consider the total cost of a mortgage, including any arrangement fees, when comparing mortgage products.
