Refinancing your home loan can be a great way to save money on your mortgage repayments or access equity in your property. However, it’s important to be aware of the costs involved in home loan refinance, as they can add up and impact the potential savings you may make.
- Application Fees
Many lenders charge an application fee when you refinance your home loan. This fee can range from a few hundred dollars up to several thousand dollars, depending on the lender and the size of your loan.
It’s important to factor in the application fee when considering the potential savings of refinancing your home loan. In some cases, the savings may not be enough to justify the cost of the application fee.
- Valuation Fees
When you refinance your home loan, the lender may require a valuation of your property. This valuation is used to determine the current market value of your property and ensure that the loan amount is appropriate.
Valuation fees can range from a few hundred dollars up to several thousand dollars, depending on the lender and the location and size of your property. It’s important to factor in the valuation fee when considering the potential savings of refinancing your home loan.
- Legal Fees
Refinancing your home loan also involves legal fees. These fees cover the cost of transferring the mortgage from your old lender to your new lender and can range from a few hundred dollars up to several thousand dollars.
It’s important to factor in the legal fees when considering the potential savings of refinancing your home loan. In some cases, the savings may not be enough to justify the cost of the legal fees.
- Break Costs
If you refinance your home loan before the end of your current loan term, you may be charged break costs. Break costs are fees charged by your current lender to compensate them for the loss of interest they would have earned if you had stayed with them for the full loan term.
Break costs can be significant, particularly if you have a fixed-rate home loan. It’s important to factor in the potential break costs when considering the potential savings of refinancing your home loan.
- Discharge Fees
When you refinance your home loan, your current lender will need to discharge your current mortgage. Discharge fees are fees charged by your current lender to cover the cost of discharging your mortgage.
Discharge fees can range from a few hundred dollars up to several thousand dollars, depending on the lender and the size of your loan. It’s important to factor in the discharge fee when considering the potential savings of refinancing your home loan.
