Home loan fees and charges can vary significantly from lender to lender, and adviser to adviser, so to help you assess your budget we have listed a few of the fees and charges you will need to consider.

As your mortgage adviser, I can confirm which fees will be applicable to you and help you budget for these and I will provide you with my personal disclosure document which outline fees or commissions I might receive, if applicable.

Bank and lender fees

Entry/setup application fee
Also called an establishment fee, an application fee is charged by the lender to cover the initial costs of processing your home loan application. Depending on the lender, this fee may cover additional costs such as property valuations. These fees vary considerably so it is important to discuss them with your mortgage adviser.

Entry/setup lenders mortgage insurance (LMI)
LMI is usually required when the Loan to Value Ratio (LVR), the value of the loan amount opposed to the value of the property is greater than 80%. LMI protects the lender from any losses that may occur as a result of a default by the borrower (i.e. the borrower is unable to repay the loan).

Entry/setup valuation
A valuation is an assessment on the market value of a property at any given time. Lenders may order a valuation on the property you intend to purchase or use as security for your home loan. The cost of valuations may be included in your application fee or there may be an additional charge from the lender.

Exit discharge fee
Sometimes called an exit fee, a discharge fee is payable at the time you discharge your home loan. This fee covers the administration costs of preparing your loan discharge documents.

Exit penalty interest
Payable on fixed loans for early discharge. When a lender agrees to a fixed term loan, they are relying on the loan being held for the full term in order to recoup their own costs for funding the loan. Penalty interest may be charged if you break the fixed rate loan early.

Ongoing fees account keeping fees
You may incur account keeping fees on your home loan account. Account keeping fees will usually be added monthly to your home loan account.

Ongoing fees package fees
If you have your loan packaged with other banking products, such as a savings account and credit card facilities, you may be charged an annual fee to cover the costs of the package. Generally if you are paying package fees, you will not be charged account keeping fees.

Other lender fees

Account transaction fees
You may be charged a fee for certain account transactions, such as redrawing money from your home loan. These fees are usually based on usage.

Switching fees
A switching fee may be charged if you switch from one product to another within the same lender e.g. variable rate to fixed rate home loan. This fee covers the administration costs of the lender.

Government and statutory charges
As part of purchasing property you may be liable for a number of government and statutory charges such as mortgage registration fees.

Legal fees
Legal fees relate to the legal processing of your property purchase by a qualified conveyancer or solicitor. There are generally two components to the conveyancing fee charged by a solicitor or licensed conveyancer: a legal fee and a disbursement fee. Legal fees cover the time and skill of your solicitor/conveyancer; disbursement fees cover any costs incurred by your solicitor/conveyancer in conducting enquiries and searches on your behalf. Depending on the number of searches your solicitor conducts, this will likely affect the final cost.

Other charges to consider when moving into your new home

Building/pest inspection
Before buying it’s smart practice to organise a pest and building inspection. A building inspection will provide information on any major structural problems or faults such as water leaks or cracks in walls. Similarly a pest inspection will identify any pests such as termites that are present in the property. You may be able to use these findings to negotiate a lower purchase price, especially if any repairs/treatments are required to fix a problem.

Rates
You’ll be liable to pay rates on the value of your property to your local Council on whatever portion of the quarter remains after settlement. Your rates generally include sewerage and water costs, as well as a charge against your property to help pay for local infrastructure. Rates will vary widely depending on the area you live in and the value of your property; you will need to check with your Council about your rates.

Strata fees
If you purchase an apartment or unit, you will be liable for strata fees to help maintain shared areas such as the building exterior, gardens, pools etc.

Utilities connections
It can be surprising to add up the services you need to disconnect and reconnect when you are moving; telephone, electricity, water, gas, subscription TV and the internet are all counted as utilities connections.

Moving
When you purchase your new property, don’t forget to add in the costs associated with moving into your new home. Depending on how far you’re moving, the costs can add up. Some of the costs to consider include:

• Removalist or hire of truck/van for self-removal
• Boxes and packing tape
• Petrol for your car
• Transit insurance