MyRate Education Centre
Lender Fees
Note:
MyRate has no fees on standard applications so most of these do not apply to MyRate loans. Learn more. |
When buying a home or investment property, there are fees and charges you should be aware of. Some fees are charged by the lender for their time and services (these are called lender fees). Other fees are charged by the government and will apply to you regardless of which lender you choose (these are called government fees).
The following are some general lender fees you may be charged. Remember, these fees are not charged by all lenders, and it’s worth shopping around to find a lender with low, or no fees.
Application/establishment fee (this may or may not include the valuation fee)
Solicitors/legal fee
- This is a fee for the solicitor acting on behalf of the lender.
- Covers time spent with lawyers
- Loan document preparation
Legal disbursements (covers out of pocket expenses such as title search, photocopying, postage)
Settlement fee (cost for settlement taking place)
- For a purchase the cheques will be drawn as per instructions from your solicitor, in favour of the vendor, the outgoing lender, government departments for costs incurred and possible adjustments on council and water rates.
- For a refinance a cheque will be drawn in favour of the outgoing lender and the balance per the client’s instructions.
Monthly or annual fees (maintenance/ongoing cost of the loan – charged for the life of the loan)
Redraw fees
- Fees for redrawing on additional funds.
- There may also be a minimum redraw restriction.
Additional repayment fees
- Fees charged for making additional repayments into your loan
Exit fees
- Fees for discharging your loan
Deferred establishment fees
- This is charged when you repay the loan in full and discharge the security within 5 years of the date of loan funding. (If you repay the loan in full and do not discharge the security, the deferred establishment fees do not apply).
Variation of loan/splits (after loan is drawn up/after settlement)
- This is when you request to make a change to your loan product/loan limit/repayment frequency/repayment type/repayment amount. It might also include a security substitution or adding an additional security.
Non-proceeding fee
- A fee charged for not proceeding with the loan after the valuation has taken place. Additional fees may also be charged if loan contracts have already been prepared.
- If the lender pays an independent valuation company to value your property and you proceed with the loan, they are able to recoup this cost of the valuation over the life of the loan. If you don’t proceed with the loan, this cost needs to be recouped to avoid driving up costs for all customers.
In addition to lender fees, you should also budget for fees such as:
Your solicitor
- As well as a fee for their service, your solicitor or conveyancer should also look after things such as water rates, title searches and more (see our guide on conveyancing).
Inspections
- To find out whether there is anything adverse that will affect the valuation of your property e.g. pest inspections etc.
Tips:
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Schedule your inspection before your lender orders the valuation, so if you change your mind or the inspection finds something adverse, you won’t be charged a valuation or a non proceeding fee.
Ask your solicitor to order an inspection of the strata records to see if any special levies may be charged by the strata company after you move in. |
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