A booking fee is a charge some lenders require when you apply for a mortgage, essentially to reserve the product for you. It is separate from the arrangement fee and is usually a smaller amount, typically £99 to £250. The key characteristic of a booking fee is that it is almost always non-refundable — you will not get it back even if the mortgage application falls through or you decide not to proceed.
Not all lenders charge a booking fee, and those that do typically offer it alongside (not instead of) an arrangement fee. When budgeting for your mortgage, make sure to account for both the booking fee and the arrangement fee as separate costs.
Because the booking fee is non-refundable, it is worth being reasonably confident that you want to proceed with the application before paying it. If there is uncertainty about whether your application will be approved, discuss this with your mortgage adviser first.
You apply for a mortgage and the lender charges a £199 non-refundable booking fee at application, plus a £995 arrangement fee payable on completion. If your application is declined or you withdraw, you lose the £199 but do not pay the £995 arrangement fee. Your total upfront fees if the mortgage completes are £1,194.
Key Points
- A charge to reserve a mortgage product at application stage
- Typically ranges from £99 to £250
- Usually non-refundable, even if the mortgage does not complete
- Separate from and in addition to the arrangement fee
- Not charged by all lenders