What are Home Loan Fees?
Home loan fees are the fees that financial institutions charge borrowers with home loans. Home loan fees are charged when applying for a home loan and throughout the term of the home loan and can include
- establishment fees
- exemption fees
- early-exit fees (now effectively banned)
- break fees
You can compare the Comparison Rate which is also known as the ‘real rate’, the ‘Annual Average Percentage Rate’ or ‘AAPR’ which calculates the average annual rate including any upfront or ongoing fees over the life of the loan.
In 2009 the Reserve Bank of Australia (RBA) reported that banks received $5 billion from home loan fees from Australian households. The amount charged for home loan fees will depend on the type of home loan, the amount borrowed, the term and the circumstances. Each lender charges different types of home loan fees at different amounts, so be sure to check with your lender before signing the contract.