Nationwide said the fee, introduced on 1 April, is to cover administration costs but added its remortgage deals would still come with free legals and valuations.
Sarah King, press offer at Nationwide, commented: “The fee is basically to help us cover administration costs.
“Even if you added our reservation and arrangement fees together, it would still come to less than what our competitors charge.”
David Hollingworth, mortgage specialist at London & Country, said: “We have seen a steady creep upwards of arrangement fees.
“But instead of introducing this fee across the whole board, Nationwide has chosen to load the arrangement fee for a specific type of business, in this case remortgages.
“So this should be welcomed. The fee-free incentives are still there which make the deals competitive. But for clients it is now vital to factor in this added fee.”
Simon Chalk, mortgage planner at Mortgage Portfolio Services, commented: “Arrangement fees are getting higher among the vast majority of lenders while others are introducing them for the first time.
“It used to be that clients would only pay these fees if they had a fixed or capped rate because the money is funded.
“Now they are creeping in across all types of products. If the lender is not making money on the interest rate then the easy way to retain money is to charge these fees,” Chalk said.
