Finance glossary
Arrangement Fee
Also known as: Product fee, Booking fee
In simple terms
An arrangement fee is a charge some lenders make for setting up a mortgage deal. It can be a few hundred to a couple of thousand pounds, and is often added to the loan.
On this page
What does arrangement fee mean?
An arrangement fee — also called a product fee or booking fee — is what a lender charges to set up a particular mortgage product. Not every deal has one, and the size varies a lot between lenders and products.
Deals with the lowest interest rates often carry the highest arrangement fees, and vice versa, so the fee and the rate need to be looked at together.
How an arrangement fee works
You can usually either pay the fee upfront or add it to the mortgage. Adding it spreads the cost but means you pay interest on the fee for the life of the mortgage, so it can cost much more overall.
Some lenders split the charge into a small, non-refundable “booking fee” paid on application and a larger “arrangement” or “product” fee paid on completion. The fee is separate from valuation and legal (conveyancing) costs.
How could this affect me?
A low headline rate with a big arrangement fee is not always cheaper than a slightly higher rate with no fee — it depends on the size of your mortgage. On a small loan, a large flat fee has a bigger proportional impact.
Compare deals on the total cost over the deal period (rate plus fees), not just the interest rate. Watch which parts of the fee are refundable if the deal falls through.
Things to watch out for
- A low rate with a high arrangement fee is not always the cheapest deal — compare the total cost.
- Adding the fee to the loan means you pay interest on it for the whole mortgage term.
- Booking fees are often non-refundable even if the mortgage does not go ahead.
Know your rights
- Mortgage fees must be disclosed clearly under the FCA’s MCOB rules, including in the standardised illustration you are given before applying.
- You can complain and escalate to the Financial Ombudsman Service if fees were not made clear or were applied unfairly.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- MoneyHelper, Mortgage-related fees and costs at a glance (opens in a new tab). Accessed 22 Aug 2026.
- FCA, MCOB — Mortgages and Home Finance: Conduct of Business (opens in a new tab). Accessed 22 Aug 2026.