High arrangement fees are hardly fair treatment for clients

I’m interested in the continued talk about treating customers fairly, especially in relation to rates. Despite the Bank of England base rate being 0.5%, to secure an advantageous interest rate on a buy-to-let mortgage of 3.99% – which is hardly giving it away – our clients have to pay an arrangement fee of 3%.

So, my prudent client who is buying a five-bedroom property in north London with a £577,000 mortgage has to stump up more than £17,000. Even on a more probable £150,000 advance, £4,500 or £5,200 is added on.

Huge arrangement fees seem to be prevalent among residential mortgage lenders – all this nonsense so the lender can reduce the initial pay-rate.

While I realise the banks are not borrowing at 0.5%, a 3% or so margin and a one-off 3% or more fee on top is questionable.