Home loan fees explained.
When budgeting for a home purchase or refinance, most people focus on interest rates — but understanding the fees involved is just as important. While fees have reduced across the industry over the years, there are still a few you may encounter depending on the lender, product type, and loan structure.
At Lumo, we explain these fees clearly upfront so you know exactly what’s involved — no surprises at settlement and no hidden costs buried in the fine print.
Upfront fees
These are costs you might pay when establishing a new home loan.
1. Application or establishment fees
Many lenders no longer charge these, but some still do, especially for more specialised loan products.
They cover the cost of processing and documenting your loan.
2. Valuation fees
Most standard valuations are free, but in some cases — such as unusual properties, rural land or complex security structures — the lender may pass on valuation costs.
3. Legal or documentation fees
Some lenders charge a small fee for preparing loan documents or reviewing security information.
These fees tend to be modest but vary widely between institutions.
Ongoing fees
These may apply annually or monthly depending on the product.
1. Annual package fees
Common with loans offering multiple offsets, discounted interest rates or bundled banking features.
Annual fees usually sit between $200–$400.
They can be worth paying if the packaged rate discount saves more than the fee itself.
2. Monthly account keeping fees
Less common today but still present with some loan types.
Usually under $10–$15 per month.
3. Offset account fees
Some lenders charge for offset access unless you're on a package product.
We always weigh these costs against the interest-saving benefits before recommending a structure.
Government and third-party fees
Not lender charges — but essential parts of the process.
1. Mortgage registration fee
Charged by the state government to register the lender’s interest in the property.
2. Transfer fee
Paid to your state government when transferring the property title into your name.
3. Stamp duty
The largest upfront cost for most buyers (covered in detail in Article 14).
These fees vary by state and property type.
Fees when refinancing
When switching lenders, you may encounter:
1. Discharge fee (old lender)
A small administrative cost to close your existing loan — typically $150–$350.
2. Registration fees (state)
To remove your old lender from the title and register the new one.
3. New loan establishment or package fees (if applicable)
Depending on the product you’re switching into.
Even with these costs, refinancing often results in net savings if the rate or structure is significantly better.
Fees for breaking a fixed-rate loan
If you're on a fixed rate and need to:
Refinance
Sell the property
Pay out the loan early
Make extra repayments beyond the allowed limit
…you may incur break costs.
Break costs can be small or significant depending on:
How long is left on the fixed period
Movements in wholesale interest rates
The type of fixed product chosen
We always run the numbers before recommending any changes to a fixed-rate loan.
Fees you shouldn’t pay anymore
Because of industry changes, most lenders do not charge:
Ongoing redraw fees
ATM fees
Early exit fees on variable loans
Penalties for switching repayment frequency
If a loan includes unusual or outdated fees, we simply don’t recommend it.
Avoiding unnecessary costs
We regularly help clients minimise or avoid fees by:
Choosing lenders with no annual fees when features aren’t needed
Matching clients to products with free offset access
Avoiding fixed-rate loans for buyers planning upcoming changes
Checking whether valuation fees can be waived
Structuring refinances so break costs are avoided
Good advice often saves more than any single fee ever costs.
Let’s chat.
If you’d like a clear breakdown of the fees that apply to your purchase or refinance — including whether they can be reduced or avoided — we can walk you through everything upfront. Let’s chat.
This page provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.