Application Fee
Many lenders charge an application fee when you apply for a refinance. This fee covers the cost of processing your application and can range from a few hundred to several thousand dollars. It’s important to note that not all lenders charge an application fee, so be sure to shop around and compare offers.
Valuation Fee
When you refinance your home loan, your lender will want to assess the value of your property. This involves hiring a professional valuer to conduct a property valuation. The cost of this service is typically passed on to you in the form of a valuation fee. Valuation fees can vary depending on the size and location of your property, but they generally range from a few hundred to several hundred dollars.
Settlement Fee
When you refinance your home loan, you’ll need to go through a settlement process to transfer the ownership of the property from your old lender to your new lender. Settlement fees cover the cost of this process, including the preparation of legal documents, the transfer of funds, and the registration of the new mortgage. Settlement fees can vary depending on the complexity of the transaction, but they generally range from a few hundred to several thousand dollars.
Discharge Fee
If you’re refinancing to a new lender, you’ll need to pay a discharge fee to your old lender to release the mortgage. This fee covers the cost of preparing the discharge documents and removing the old mortgage from the title of your property. Discharge fees can vary depending on your lender, but they generally range from a few hundred to several thousand dollars.
Lenders Mortgage Insurance (LMI)
If you’re refinancing to a new lender and your loan-to-value ratio (LVR) is over 80%, you may need to pay Lenders Mortgage Insurance (LMI). LMI is a one-time fee that protects your lender if you default on your loan. The cost of LMI varies depending on your LVR and loan amount, but it can add thousands of dollars to your refinancing costs.
Stamp Duty
When you refinance your home loan, you may need to pay stamp duty on the new mortgage. Stamp duty is a tax levied by the state government and is calculated based on the value of your property and the amount of your new mortgage. Stamp duty can add thousands of dollars to your refinancing costs, so be sure to factor it in when considering whether to refinance.
