Fees tend to revolve around two main areas: Outgoing and Incoming fees

Outgoing fees

The outgoing fees are the ones charged when a customer is discharging their loan with one lender and refinancing with another lender.

These fees tend to include:

• Lenders administration fee: for discharging the mortgage

• A settlement fee for drafting the discharge documents

The fee for these tends to be around $250 to $300 each.

A borrower may also be charged an early repayment fee if they have an older loan (taken out before July 1, 2011) and are exiting the loan within the first five years of taking it out. This fee depends on the lender.

A break cost fee may also be payable if the loan being discharged is a fixed rate loan.

Incoming fees

Fees charged on an incoming loan vary between lenders, so it’s crucial to know what these are.

The common ones tend to be:

• An upfront valuation fee usually paid direct to the valuer (approximately $250-$300), but can be higher in properties above $1 million or those located in remote areas)

• A settlement fee for drafting the mortgage documents (approximately $400)

• Registration fees that are usually paid to land and titles offices (approximately $100, depending on the number of applicants on the loan.

For instance, if there were two people, this fee would be doubled, with $100 due for each, or $200)

Other possible fees:

• A package fee may be charged by some lenders on their loan facilities (which factor in the valuation and settlement fee rather than separating them out) and generally costs about $350-$400 per annum.

• Servicing fees (potentially around $10 a month)

Additional stamp duty (a consideration if you’ve increased your home loan)

(Source: Resi Home Loans. Note: Fees cited are those suggested by Resi for guide purposes only)

This article is from Property Observer's free ebook Mastering the Art of Refinancing: 12 tips for success and key things to consider.