Commercial Mortgage Arrangement Fees

Commercial mortgage arrangement fees vary from lender to lender, and often depend on the risk associated with the loan.

Specialist lenders typically charge 1.5 to 2% of the value of the loan, whilst high street lenders typically add a fee equivalent 1% to the loan.

In most cases arrangement fees can be added to the loan.

Why Do Different Lenders Charge Different Rates?

Why different groups of lenders charge different levels of fees is mainly due to the type of clients that they like to attract, and their motivations for lending on commercial property.

Specialist lenders are exclusively motivated by selling the commercial mortgage loan. They are often looking for clients who do not qualify for high street lending criteria, either because of their credit status, time in business, or availability of robust business plan documentation.

High street or staus-based lenders are more interested in generating their revenues/profits through the use of products such as business bank accounts, or other anscilliary services that the bank can provide.

For high street lenders, selling the commercial mortgage is the bait to catch the fish, not the fish!