Loan Fees and ChargesAll fees & charges will be discussed with you before committing to an application for finance and also disclosed within the loan documents for your review and consent. Listed here are some of the more common fees levied when taking out a home loan.
Set Up CostsLoan Application/Establishment Fee – deducted at the time of settlement from your loan proceeds and usually includes the cost of 1 standard valuation. Some Specialist & Commercial Lenders will request a commitment fee upfront before commencing any assessment work which may or may not be refunded if the loan does not proceed.
Settlement Fee - payable when the loan is settled.
Loan documentation / Lender's legal Fees - payable to cover the lender's cost of producing the loan documents – this is sometimes included within the Application Fee
Valuation Fees - payable to cover the lender's cost of assessing the value of your property.
Lenders' Mortgage Insurance ('LMI') premium - payable to cover the lender's cost for LMI cover when required on certain loans
Please click here for an explanation of Lenders Mortgage Insurance
Mortgage Registration, Transfer of Land & Mortgage Stamp duty - payable to the applicable state government.
Please click here to access our stamp & transfer duty calculator
Ongoing Costs Interest - The interest rates offered by lenders vary from lender to lender and product to product. Selecting the right product can save you a considerable amount of money over the term of the loan
Account Keeping/Loan Administration Fees - Some lenders charge a fee, usually monthly, to operate your loan account depending on the loan product.
Annual Package Fees - Some lenders charge an annual fee for your loan account, or for a package of different financial products which might include a credit card and transaction account.
Transaction Fees - Some lenders charge fees when you transact via your loan account. These fees might be to withdraw extra money (for example, redraw fees or EFTPOS/BPay transactions), or to pay extra money into your loan account.
Penalty charges - Many lenders impose penalties under certain circumstances. These include fees for missing a scheduled loan repayment or making an inward payment that is dishonoured. Penalty interest rates generally apply if you have missed a scheduled repayment and are 2-3% above your actual rate whilst the missed repayment is outstanding, and depending on the Lender, can be higher than this.
Discharge CostsLender's Discharge Fees - these fees cover the lender's cost of paying out your loan
Deferred establishment Fees – also known as Early Termination fees, these fees may apply if you pay off your loan early, usually within 3 to 5 years of establishing the loan. The fees are sometimes calculated as a % of the initial loan amount (or more commonly a fixed dollar amount) and sometimes reduce over time. It is important to be aware of these fees before committing to a particular loan product from a lender as these fees can be quite high in some cases.
*At the time of writing, many banks have their termination fees under review and a reduction and some cases, a removal of these fees is likely to occur statrting July 2011 for mortgages taken out after this date.
Break Costs – penalty fee that may be payable for terminating a loan during a fixed rate period which reflects any economic loss incurred by the Lender
Please click here for a full explanation of Break Costs.
Discharge Registration Fees - these government fees are charged for the release of the mortgage against your property and are payable for each security released.