Home Loan Savings
You can make substantial savings from your home loan rate depending on your home loan needs just by choosing a smarter home loan.
Home loan charges may vary significantly from lender to lender, and we have included some of the charges and fees you will need to consider to help you evaluate your budget.
Your mortgage advisor can confirm which fees will apply to you and assist you with your budget.
Bank and lender fees
Entry/setup application fee
Also called an establishment fee, the lender charges the application fee to cover the initial costs of processing your home credit application. This fee might cover additional costs, such as property valuations, depending on the lender. These fees vary considerably, so it is essential to talk to our mortgage specialist.
Entry/setup lenders mortgage insurance (LMI)
LMI is usually required when the value ratio of the loan (LVR) is higher than 80 percent compared to the property’s value. LMI protects the lender from any loss caused by the borrower’s default (i.e., the borrower cannot repay the loan).
A valuation is, at any given time, an assessment of the market value of a property. Lenders may request a valuation of the property you intend to buy or use for your home loan as security. The valuation costs may be included in your application fee, or the lender may charge you additional.
Exit discharge fee
Sometimes called an exit fee, an exit fee is payable when your home loan is disbursed. This fee covers the administrative costs of preparing your documents on the loan discharge.
Exit penalty interest
Payable on early discharge fixed loans. If a lender agrees to a fixed-term loan, he relies on that loan for the full term to recover his loan financing costs. If you break the fixed-rate loan early, penalty interest may be charged.
Ongoing fees account keeping fees.
You may incur account fees on your household loan account. Account fees are usually added to your home loan account monthly.
Ongoing fees package fees
If your loan is packed with other financial products, such as a savings account and credit card facilities, an annual fee may be charged to cover the package costs. Generally, you won’t be charged account fees if you pay package fees.
Other lender fees
Account transaction fees
You can be charged a fee for certain transactions on your account, such as money from your home loan. These charges are usually based on use.
You can charge a switching fee if you move from product to product within the same lender, e.g., variable-rate to a fixed-rate home loan. This fee covers the lender’s management costs.
Government and statutory charges
You may be liable for several government and statutory charges such as mortgage registration costs as part of the purchase of a property.
Legal charges relate to the purchase’s standard processing by a qualified carrier or solicitor of your property. The transport fee charged by a solicitor or licensed carrier is generally two parts: a legal fee and a disbursement fee.
Legal fees cover your lawyer’s time and skills; disbursement fees cover all costs your lawyer/conveyor incurred to conduct queries and searches on your behalf. Depending on your solicitor’s number of searches, the final cost is likely to be affected.
Other charges to consider when moving into your new home.
It is a creative practice to organize a pest and building inspection before purchase. Building inspections will inform you about any significant structural problems or defects such as leaks of water or wall cracks. Similarly, a pesticide inspection will identify harms such as termites in the property. You can use these findings to negotiate a lower purchase price, especially if a problem needs repairs or treatment.
You are liable to pay your local municipal council rates on your property’s value in any part of the quarter after settlement. Typically, your rates include sewerage and water costs, as well as charges to help pay for local infrastructure on your property. Rates will vary significantly according to the area in which you live and your property’s value; you must check your rates with your council.
When you buy an home or unit, you will be responsible for strata charges which help maintain common areas, such as the exterior of the building, gardens, pools, and so on.
It may be surprising to add the services you need when you move and reconnect; all are computed as utility connections, including telephone, electricity, water, gas, subscription TV, and the internet.
When you buy your new property, don’t forget to add the costs of moving to your new home. Depending on how far you go, the costs can increase. Some of the costs include:
- Removalist or self-removal truck/vehicle hiring
- Boxes and tape packaging
- Your car petrol
- Insurance for transit