The arrangement fee, which is also referred to as a completion fee and product fee, is applied by your mortgage provider to set up your mortgage. The average arrangement fee is £1,000, while others can charge up to £2,500, yet some mortgage schemes have no fees. When deciding which mortgage deal to choose, you need to consider both the arrangement fee and the interest rate offered. A mortgage broker will advise you on the most cost effective combination of arrangement fee and interest rate depending on the size of the mortgage you need.
However big or small your arrangement fee, you can decide to pay it straight away or add it to your mortgage (this means you’ll have to pay interest on it for the life of the loan.) If you decide not to take the mortgage or are declined, this money is usually refunded.