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What will it cost to refinance my home loan?

By Opulent Finance|Wednesday Sep 26, 2018

It’s a good idea to review your home loan each year to assess whether it continues to meet your needs and offers the best value for money. You might find refinancing your mortgage will save you money, help you streamline debt, achieve other financial goals such as purchasing an investment property using the equity or give you access to improved loan features.
To help you decide whether refinancing your home loan is right for you, take a look at our handy guide about the costs to consider.

Exit fee

You might be liable for an exit fee if you took out your existing loan before 1 July 2011. Ask your mortgage broker or lender for more information.

Settlement fee

Your current lender may charge a settlement or discharge fee for exiting your loan early. This fee compensates your lender for any loses due to you breaking the contract. Fees vary by lender but can cost upwards of $350. Contact us for more information.

Break fee for fixed rate loans

You may need to pay a fee for breaking your contract during a fixed rate period. The fee will cover your lender for any lost profit due to the contract termination. Break costs will vary based on the outstanding loan amount, fixed interest rate, current interest rate and life of the mortgage.

Application fee

This is the fee you pay when you apply for a new home loan. It’s sometimes known as an ‘establishment’, ‘up-front’ or ‘set-up’ fee. It covers the cost of the paperwork your new lender will complete to establish and lodge your loan. Some lenders don’t charge an establishment fee, and others can add it to your mortgage. If you are asked to pay a fee, you could be out-of-pocket up to $1000.

Valuation fee

Some lenders will charge a valuation fee to cover the cost of a property valuation. This can cost up to a few hundred dollars.

Government fees

Government fee types and charges vary by state, but generally include a mortgage deregistration and mortgage registration fee. These can cost up to a couple of hundred each.

Stamp duty

If you’re refinancing to borrow a larger amount, you’ll need to pay stamp duty on the difference. Rates vary by state, so speak to your mortgage broker for details.

Lender’s mortgage insurance

You may be up for lender’s mortgage insurance (LMI), even if you paid it the first time. You’ll generally need to pay LMI if you hold less than 20 per cent equity in your property at the time of refinancing. At Opulent finance we can assess the property’s value before planning for refinancing. This will tell you whether you’ll need to pay LMI before you apply for the new loan. At Opulent Finance as your Mortgage Broker Melbourne, We will work according to the custom made plan that we have set up for you. Before you submit your application with the right lender, then you know your application is more likely to get approved and will be able to assist your goals.

The good news: some lenders offer cash back of $1250 or more when you refinance. Plus some of the lenders will waive off most of the above-mentioned cost too.

Still not sure whether refinancing your home loan is right for you?

There’s a lot to consider before choosing to refinance your mortgage. If you’re not sure whether refinancing is right for you, Opulent Finance can help. We’ll consider your circumstances and goals and match you with a lender or product that meets your needs. We can also negotiate discounts or fee waivers with lenders in some situations.Call us today at (03) 8838 8726 or 0423 272 600. You can also send us an email at info@opulentfinance.com.au.

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