Home loan fees and charges in Australia: the full list and how to price them
Every fee an Australian home loan can carry, from application and valuation to package, discharge and break costs, plus government charges and a five-year cost comparison.
Home loan fees fall into four groups: upfront fees when the loan starts, ongoing fees while you hold it, event fees when you change or break something, and exit and government fees when you leave. Lenders publish their fees in a fee schedule and the key facts sheet; government charges for registering and discharging a mortgage are set by each state and territory land titles office. To compare loans fairly, convert every fee into dollars over the number of years you expect to keep the loan, and add it to the interest cost.
This guide is part of home loan rates and repayments in Australia. Fee amounts below are illustrative, not any lender's actual charges.
The fee list
| Fee | When it is charged | Who sets it | Negotiable? |
|---|---|---|---|
| Application or establishment fee | At approval or settlement | Lender | Often waived, especially when refinancing |
| Valuation fee | When the lender values the property | Lender | Often waived |
| Settlement fee | At settlement | Lender | Sometimes |
| Mortgage registration fee | At settlement | State or territory land titles office | No |
| Annual package fee | Every year | Lender | Sometimes waived for large loans |
| Monthly account-keeping fee | Every month | Lender | Rarely |
| Offset account fee | Monthly, on some loans | Lender | Rarely |
| Redraw fee | Each redraw, on some loans | Lender | Rarely |
| Rate lock fee | When locking a fixed rate before settlement | Lender | Rarely |
| Switching or variation fee | Changing loan type, splitting, fixing | Lender | Sometimes |
| Late payment fee | Missed repayment | Lender | Ask, especially in hardship |
| Break cost | Leaving a fixed rate early | Lender, by formula | No, but ask for the calculation |
| Discharge fee | Paying out the loan | Lender | Rarely |
| Mortgage discharge registration fee | Removing the mortgage from the title | Land titles office | No |
| Lenders mortgage insurance | At settlement, above 80% LVR | Insurer via lender | Avoidable with a bigger deposit or guarantee |
Rules that limit fees
- Exit fees banned. For variable home loans entered into from 1 July 2011, lenders cannot charge an exit fee (a fee for leaving early). They can still charge a discharge fee that reflects their actual administration cost.
- Unfair contract terms. Consumer protections against unfair terms apply to standard form credit contracts, and ASIC can act against terms that are unfair.
- Disclosure. Fees must be set out in your loan contract and the key facts sheet, and the comparison rate includes most upfront and ongoing lender fees. See comparison rate explained.
Government charges
Each state and territory charges a fee to register a mortgage on the title and another to discharge it. These fees are usually indexed every year on 1 July, so check the current schedule with your land titles office, for example NSW Land Registry Services, Land Use Victoria or Titles Queensland. No state or territory currently charges mortgage duty on an ordinary home loan; transfer duty (stamp duty) applies to the purchase, not the loan, and is generally not payable just because you refinance.
Worked example: five-year cost of two offers
Illustrative $500,000 loan over 30 years, held for five years:
| Loan A | Loan B | |
|---|---|---|
| Rate | 6.04% variable | 5.84% variable |
| Upfront fees | $0 | $0 |
| Annual fee | $0 | $395 |
| Monthly repayment | $3,010.62 | $2,946.51 |
| Interest paid over 5 years | $146,139 | $141,133 |
| Fees over 5 years | $0 | $1,975 |
| Total cost over 5 years | $146,139 | $143,108 |
How the interest is worked out: repayments over 60 months, plus the balance still owing after 60 months, minus the $500,000 borrowed. For Loan A, 60 x $3,010.62 = $180,637 plus a balance of $465,501, minus $500,000 = about $146,139.
Loan B is about $3,030 cheaper over five years despite the annual fee. On a $150,000 loan the result would flip, because the 0.20 point rate gap is worth far less on a small balance.
Refinancing costs to add up
When you switch lenders, the typical costs are:
- Your current lender's discharge fee
- Government fee to discharge the old mortgage
- Government fee to register the new mortgage
- New lender's application, valuation and settlement fees, if not waived
- Break costs, if any part of the loan is fixed
- LMI, if your new LVR is above 80%
- Minus any cashback the new lender pays
Enter the total in the refinance break-even calculator to see how many months the lower rate needs to pay for the switch.
How to get fees waived
- Ask directly: "Will you waive the application and valuation fees?" Many lenders do for refinancers and larger loans.
- Ask whether the annual package fee is waived above a certain loan size or for certain professions.
- If you no longer use the offset account or credit card in a package, ask to move to a basic loan with no annual fee, and compare the rate difference.
- Ask for late fees to be reversed when a missed payment was a one-off error or due to hardship.
Frequently asked questions
What is a typical annual package fee?
Package fees vary by lender and change over time, so we do not quote a figure. Check the lender's fee schedule and key facts sheet, and compare the package rate with the lender's basic loan rate.
Can my lender add new fees after I take out the loan?
Loan contracts usually allow the lender to introduce or change fees with notice. If a new fee appears, compare it with switching costs elsewhere.
Are break costs a fee?
Break costs are a charge to compensate the lender for its loss when a fixed rate is ended early. They depend on interest rate movements since you fixed. See fixed rate break costs.
Do I pay stamp duty when I refinance?
Generally no, if you are only refinancing the same property in the same names. Changing who owns the property can trigger transfer duty; check with your state revenue office.
Sources
- ASIC Moneysmart — home loan fees and switching
- ASIC — unfair contract terms and credit obligations
- Australian Financial Complaints Authority — disputes about fees
- NSW Land Registry Services — example of a state land titles fee schedule
