MORTGAGE customers often home in on the interest rates on their loan but they fail to consider other fees and charges. Upfront fees, ongoing fees and discharge fees are among the most common charges customers will frequently get hit with throughout their loan term.

Canstar’s research manager Mitchell Watson says these costs should be considered before signing up to a loan because they can quickly add up.

‘There are a number of loans out that won’t have any fees but the vast proportion will have a fee involved whether it’s on application or ongoing fees,” he says.

‘Upfront fees can range from zero up to nearly $500 so it’s a considerable upfront cost.

‘But the real cost people should be focusing on outside of that is the ongoing fee, it could be the equivalent of paying a few extra percentage points on your interest rate, that’s how much a difference those fees can make.’

Figures from Canstar show ongoing fees range anywhere from $60 to nearly $800 a year and can be charged as frequently as monthly.

Discharge fees may also be charged when the loan is paid out in full.

The Reserve Bank of Australia has kept the cash rate on hold at a record low of two per cent.

Rates remain low – many fixed rates are below four per cent and many variable home loan deals are slightly higher prompting many borrowers to review their home loans and look to switch to a better deal.

But Mortgage Choice spokeswoman Jessica Darnbrough urges customers not to just focus on the interest rate when taking out a new home loan or refinancing.

‘There are other things you need to consider such as loan application fees, registration fees, stamp duty, lenders’ mortgage insurance and bank fees and charges,” she says.

‘If you are refinancing you need to know all the fees and charges that you are paying so you know you are getting a better deal.’


– Upfront fees – a one-off fee charged at the time of taking out the loan.

– Ongoing fees – charged every month or year for administering the loan.

– Discharge fees – charged when the mortgage is paid out in full.

– Break fees – these apply if you exit a fixed-rate loan early and they can be costly.

– Refinancing fees – when jumping lender you may be charged a range of refinancing fees by your new lender.

Posted by Sophie Elsworth – Herald Sun on 10th August, 2015