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What are the costs to refinance?

Although refinancing your home loan has the potential to make you some hefty savings, it’s important to weigh up the costs involved. Here’s the lowdown on the typical fees and costs involved.

Discharge fee

What is it? A fee paid to your current lender to cover the administration expenses involved with paying out your existing loan.

How much? Discharge fees vary depending on the lender, but as a rule of thumb expect to pay around $350.

Who is it paid to? Your current lender.

Fixed loan break costs

What is it? If your current loan is on a fixed rate, you’ll likely need to pay to finish the fixed term early (in other words, it’s a fee for ‘breaking’ the fixed term of the loan). The longer the length of time left on the fixed term, the higher the break costs will be.

How much? A number of variables need to be taken into account when calculating how much the break fee will be. These include the length of time left on the fixed term, the agreed fixed interest rate and whether current interest rates are higher or lower than when the loan was first fixed.

Who is it paid to? Your current lender.

Application fee

What is it? In some cases your new lender may charge an application fee to cover the administration costs to set up your new home loan. Other names for an application fee include loan establishment fee or document preparation fee.

How much? Once again, it varies depending on the lender and the type of home loan. However some lenders will waive application fees entirely. St.George, for example, will waive the application fee if you take out your new loan under the Advantage Package ($395 annual package fee applies).

Who is it paid to? Your new lender.

Settlement fee

What is it? This covers the costs involved with paying out your current lender and arranging to switch to your new mortgage.

How much? Around $100 but this varies by lender.

Who is it paid to? Your new lender.

Valuation fee

What is it? Your new lender will need to have your property valued to determine what its current market value is and if they are prepared to lend on it.

How much? Generally between $100-$200, but some lenders will waive the valuation fee. St.George waives the valuation fee if you take out a new loan under the Advantage Package ($395 annual package fee applies).

Who is it paid to? Your new lender.

Mortgage registration fee.

What is it? A state government fee for registering your new home loan. Because your property will be used as security for your new home loan, state governments require all mortgages to be registered. That means should you sell your home in the future, buyers can check for any existing claims on the property.

How much? Varies depending on the state or territory.

Who is it paid to? The amount that needs to be paid is collected by the new lender who will then pay it to the relevant state or territory revenue office.

Mortgage discharge registration fee

What is it? Another state government fee that’s payable when you switch from one home loan to another.

How much? Varies depending on the state or territory.

Who is it paid to? The amount that needs to be paid is collected by the new lender who will then pay it to the relevant state or territory revenue office.

Title search fee

What is it? As the name suggests, this fee is charged for checking the public records to confirm you’re the legal owner of your home.

How much? Varies depending on the state or territory.

Who is it paid to? The amount that needs to be paid is collected by the new lender. They’ll then pay it to the relevant state or territory revenue office.

Any recommendation made in this article does not take your objectives, financial situation or needs into account. Read the terms and conditions at stgeorge.com.au before making a decision and consider if the product is right for you.

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Any recommendation made in this article does not take your objectives, financial situation or needs into account. Read the terms and conditions before making a decision if the product is right for you.