All home loans have associated fees, costs and charges. The most common ones you will encounter are as follows:
Loan application fees:
A loan establishment fee that is charged by a lender. These vary from lender to lender and typically cost between $300 and $800.
The lender may charge you a fee to have the property independently valued. This is often carried out before loan approval and will be charged even if the loan is not approved. The fee is based on the property’s value and is usually charged at 0.1%. Therefore, a $300,000 property valuation will incur a $300 fee.
Property and title search:
This is a government fee that is charged by your lender for the conduct of a property search. Fees vary depending on the state that the title is held in and on the type of property. Typically fees range from $25 to $250.
This is a government tax charge, which is incurred at the time of sale. This fee varies from state-to-state and is calculated as a percentage of the purchase price of a home. Therefore, the greater the home’s value, the greater the stamp duty. However, not all states charge this tax. Please refer to the table below for an example.
ACT Property Cost: $300,000
Stamp Duty Payable: $6,600.00
A legal service fee that is charged at the time of property settlement. A conveyancer is a property solicitor that makes sure all utility charges and other costs associated with home title transfer are accurate and correct at the time of sale. The fee charged for a conveyancer’s service is typically from $300 to $1000 and can be from $800 to $1500.
Lender’s mortgage insurance:
An insurance policy that covers the lender for loan repayment default. This insurance is mandatory if the lender lends more than 80% of the property price to a borrower. The fee charged is typically a percentage of the loaned amount. For example, if you want to borrow $255,000 to purchase a $300,000 property, mortgage lender’s insurance will cost you between $2,000 to $2,700, depending on the lender you are borrowing the funds from.
Annual and ongoing fees:
A bank fee that is charged over the duration of the loan. This varies from bank-to-bank and is usually between $5 to $20 per month.
A government fee charged to transfer the title of a property into another person’s name. Please refer to the table below for current rates.
Mortgage registration fee:
A government charge to register a mortgage in the new property owner’s name. Current rates are displayed in the table below.
*Please note that these figures stated are current and there were many fee changes as at September 2015 which we have included above.