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Ongoing Home Loan Fees You Should Know

Apart from your monthly home loan repayments, you may also need to pay additional ongoing fees, depending on your lender and loan product. Depending on the lender, you may be able to take advantage of promotional offers to have these fees waived, or you may be charged for certain loan-related transactions. Alternatively, some lenders may not charge any ongoing fees at all. 

What are Ongoing Fees?

Ongoing fees are the extra charges your lender tacks on in addition to the interest. These include annual fees, monthly account-keeping fees, and offset fees. Think of them as the annoying younger sibling of your mortgage repayments – always there, constantly demanding attention. Keep them in check, and you’ll be the boss of your home loan.

Ongoing Fees You Should Keep Track

Monthly Service Fee 

Your home loan may have a monthly service fee, which covers the cost of servicing and administering your loan. This fee can include charges for redraw facilities or prepayment fees on a fixed-rate loan. The fee is typically between $5 and $15. 

Annual Fees 

If your mortgage is part of a package deal, you may be required to pay an annual fee to receive reduced interest rates or other promotional benefits. Many lenders offer a waived fee for the first year to attract customers. These fees typically range from $300 to $400 and can be a worthwhile expense when considering the savings from the deal. 

Redraw Fees 

Some lenders offer a redraw feature that allows you to withdraw any extra payments you’ve made over the life of your loan. You may be charged a fee for each redraw, but some lenders may waive this fee as part of a promotion. Others advertise “fee-free redraws.” The fee for each redraw is typically around $50. 

Late Payment Fees 

You may be charged a late payment fee if you fail to pay your minimum monthly repayment amount by the due date. The fee is usually around $20, and there may be a grace period up to five business days after the due date. If you struggle to make your next payment, contact your bank’s financial hardship team or ask for a freeze. 

Switching Fees 

If you’re looking to fix your mortgage or switch to a variable rate, your lender may charge a switching fee. Refinancing costs and fees will vary between lenders, but the savings from refinancing should outweigh switching costs. Use a home loan calculator to estimate potential savings. 

Portability Fee 

Home loan portability allows you to keep the same loan product but change the security property. This feature typically incurs a fee, which varies between lenders but is usually around $200. 

Want to give your mortgage cost the boot and keep those loan fees down? Some fees are unavoidable, but lenders may waive them as part of special offers. So, don’t settle for second best – regularly compare home loans in the market and see what deals you can snag. And don’t forget to dig deep into the fees – our reviews make it easy to compare how often a fee is charged, so you know if you’re getting the best deal. 

You can also ask your mortgage lender for discounts. Sometimes they’ll even waive application fees for a new home loan. And if you want to save thousands of dollars, make sure you put down 20% of the home value as a down payment – that way, you can dodge the LMI bullet. 

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