Abbey has launched a new mortgage for big borrowers with an “arrangement fee” of nearly £10,000 for mortgages of between £500,000 and £750,000. Daily Telegraph

James Cotton, mortgage specialist at London & Country, said that £10,000 would seem a “ridiculously big fee” to many borrowers.

But Nici Audhlam Gardiner, head of mortgages at Abbey, said: “The money is used to offset the cost of arranging a mortgage and to allow us to offer customers a choice.”

Several other mortgage lenders charge 2% arrangement fees on loans of more than £500,000, resulting in charges of £10,000 upwards.

Cotton said: “Borrowers have to do their sums and check that the rate and fee together offer good value. If you are after a big mortgage, don’t just assume that you have to pay a huge fee.”