What is an...

Arrangement Fee

An Arrangement Fee (sometimes called a Completion Fee or Booking Fee) is an administration charge made by lenders for arranging credit – usually for a mortgage or for a business loan and sometimes for car finance.

Under the Consumer Credit Act 1974, an Arrangement Fee must be quoted in your written offer of credit and in your Credit Agreement. Not all lenders charge an Arrangement Fee.

Will the Arrangement Fee appear on my Credit Report?

The Arrangement Fee itself is unlikely to appear on your Credit Report but, depending on the lender, the amount may be added to the account’s total balance. You can check how your credit accounts appear by viewing your Credit Report.

Our Multi Agency Credit Report gathers your data from four Credit Reference Agencies to ensure you don’t miss anything important.

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How much are Arrangement Fees?

The size of an Arrangement Fee can vary from a couple of hundred pounds up to 1% of the mortgage value, which can be a sizable sum. Nowadays, if you require a fixed rate or discounted mortgage you will probably have to pay an Arrangement Fee.

The Arrangement Fee is intended to cover the administrative costs of setting up the credit facility.

You should look very carefully at any conditions associated with the fee: some lenders expect you to pay when you submit your mortgage application and it might not be refundable, though this must be disclosed at the point of agreement. Other lenders add the Arrangement Fee to the loan, which means that you will pay more in interest over the course of the loan.

Be wary of mortgage lenders that offer low interest rate loans coupled with high Arrangement Fees in an attempt to obtain more favourable ratings in mortgage comparison tables.

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