How much should a lender's arrangement fee be?

How much should a lender's arrangement fee be?

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There's really no simple answer for how much a lender's arrangement fee should be because there's a huge variation. You can get mortgages with no arrangement fee whatsoever. The trade-off for that is that the lender will charge you a higher interest rate. Having a small mortgage can offer really good value. You can avoid an arrangement fee - typically around £500 - in exchange for paying a slightly higher rate of interest, which, if your mortgage is only £25,000, can be a really good value. At the other end of the scale, if you have a large mortgage, then paying a large arrangement fee, which could easily be two or three thousand pounds at the top end of the scale, might be a very good price to pay in order to get a really low interest rate. Arrangement fees vary hugely, and you need to take them into account in deciding which is the best mortgage, just as much as you take into account the interest rates and other features.