These are fees paid to the lender which will vary dependent on the lender selected and may or may not apply depending on the particular product chosen.

Booking fees tend to apply to limited offer mortgage products such as fixed rates. The lender will allocate a tranche of money to a particular product and once a Booking fee has been paid you have effectively reserved your slice of that money. Even if your purchase does not compete until after the product has been withdrawn your chosen product will be secure. Booking fees usually have to be paid upfront at application stage although some lenders allow them to be added to the loan.

Arrangement fees tend to apply to the most competitive interest rates and can therefore be seen as a payment made in lieu of a lower interest rate and therefore lower monthly payment. They can either be a fixed amount or a % of the overall loan. A fixed monetary amount could be preferable for a large loan and vice versa a fixed % of the loan could be preferable for a low loan. Whilst headline rates can always look attractive, care must therefore be taken as to which is most suitable route to go down. Dependant on the size or even term of the mortgage it may be more appropriate to look at a higher rate product with no lender fee.