Most home loans come with their share of fees. Don’t fret over the length of this list, as you probably won’t be subject to all of them. You may even be able to convince your lender to nix a few.

It’s also not an exhaustive list as every lender has its own fee schedule.

Without further delay… your list of the most common home loan fees you might see:

Upfront fees

These are one-off upfront fees you may encounter at the beginning of the home loan process. They may include fees to your lender and to interested third-parties like the government and your solicitor.

Upfront lender fees

• Application fee. Also be called an establishment fee and it pays for the lender to organize your loan whether you settle or not. Some lenders will waive this fee.
• Valuation fee. Pays for a qualified independent valuer to assess your home’s value. Some application fees may cover this up to a certain amount, with you paying any difference.

Upfront government fees

• Stamp duty. A percentage of the total cost of your property, which goes to your state’s revenue department (percent varies by state). It’s more of a tax than a fee.
• Mortgage registration fee. Pays the state to register the purchased property as the security on the home loan.

Other upfront fees

• Conveyancing fees. Fees paid to your solicitor or conveyancer (if you choose to use one) to help you prepare and organise your contract.

Ongoing fees

These are regular, ongoing fees you may have to pay your lender throughout the life of your loan.

• Monthly service fees. A regular monthly account-keeping fee.
• Annual fees. A yearly fee that usually only applies to package home loans, which are home loans bundled with other financial products.

Exit fees

These are one-off fees you may have to pay when you pay off or close out your loan.

• Discharge fee. Also called a settlement fee, this applies when you close out your loan (ie, pay it off, sell your property or refinance).
• Early-repayment fee. Applies when you pay off your loan early. Lenders can charge this on any fixed-rate loan but cannot charge this on variable-rate loans approved from 1 July 2011*.

Special fees

These are fees you might have to pay if you’re taking out a special type of loan, like a fixed-rate loan or low-deposit loan.

• Rate lock fee. A special fee to lock in your rate with a fixed-rate loan.
• Security guarantee fee. A special fee that applies when you have a guarantor on your loan.
• Lenders Mortgage Insurance (LMI). An insurance premium that applies when you take out a low-deposit loan (usually under 20% deposit).
• Redraw fees. Apply when you withdraw funds from a loan account that you’ve made extra repayments into.

Bottom line

Fees are a fact of life, especially for a financial product you’ll carry with you for a long time. It’s important to become familiar with this list before you start researching home loans. That way you won’t be caught off guard when you do come across these fees in your search and you’ll know what you’re talking about when it’s time to negotiate your loan terms.

The information in this blog post is general in nature and does not constitute personal financial or professional advice. It is not intended to address the circumstances of any particular individual. We do not guarantee the accuracy and completeness of the information and you should not rely on it. Before making any decisions, it is important for you to consider your personal situation, make independent enquiries and seek appropriate tax, legal and other professional advice.

*https://www.legislation.gov.au/Details/F2019C00090

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Online home loan calculators can be among the most valuable tools you’ll find as you seek to maximise your borrowing capacity, nab the best deal and work out the most cost effective way to pay the darn thing off. 

What is a home loan calculator?

“Home loan calculator” is actually a catch-all term that applies to an entire category of calculators that each has its own function. 

For example, one type of calculator will estimate how much you can borrow, while another will let you experiment with different payment strategies. There are even calculators that will help you estimate your stamp duty based on where you plan to buy your home. 

Some require more input from you than others, so you’ll need to know what to expect from each one before jumping in.

With that in mind, here are the most popular types of home loan calculators you’ll find on the net. Keep in mind that they all provide estimates only. 

Home loan eligibility calculator

A home loan eligibility calculator helps you calculate the size of loan you may be eligible for. You’ll have to input some of your personal financial details such as:

• Your income
• Your annual expenses
• How many dependents you have 
• Any other loan repayments you are making
• The amount of interest you expect to pay
• The term (or length) of your loan

If you’ve entered everything correctly, the calculator will estimate how much you’ll be eligible for but you’ll still need to go through the application process to get the true amount.

These can also be called borrowing calculators or borrowing power calculators. 

Loan repayment calculator

You can think of a loan repayment calculator as a mortgage calculator, since this type of calculator helps you understand the details of your mortgage once you know how much you plan to borrow. 

It will estimate how much you’ll pay on an ongoing basis, how you  will pay down your interest and principal over time and how much in total you’ll spend by the time it’s all said and done.

A loan repayment calculator doesn’t require as much input as the borrowing calculator does. 

You’ll just need to provide the following:

• How much you’ll be borrowing
• The term (or length) of your loan
• Your interest rate and whether it’s variable, fixed or introductory
• Whether you plan to repay the loan monthly, fortnightly or weekly

Home loan offset calculator

An offset account is a transaction account linked to your home loan. The more money you stash away into this account, the less you pay in interest on your home loan. 

An offset calculator lets you see how your repayment plan will benefit from a well-funded offset account.  

Stamp duty calculator

Stamp duty is a tax you pay on large purchases and transfers of property, like real estate and vehicles. The amount you’ll pay differs based on the value of the property and where the property is located. 

It’s important to know how much you’ll pay in stamp duty because this expense can cut into the amount you’ll ultimately be able to borrow. 

A stamp duty calculator simply asks you for a few details like:

• How much you’re paying for the property
• The state or territory where the property is located
• Whether or not you’re a first-time buyer (as certain concessions may be available if you are)
• Whether you’ll be living in the property or will be using it for investment purposes.

Other calculators

You may come across other home loan calculators, but most are just fancier versions of the loan repayment calculator:

• Extra repayments calculator. This lets you see what happens to your repayment plan if you decide to voluntarily increase your payment amount at a particular point in the future.
  
• Lump sum calculator. This shows you what will happen to your repayment plan if you decide to make a large lump sum payment at some point in the future.
  
• Home loan split calculator. This shows you how your repayments would look if part of your loan was set to a fixed rate and part of it to a variable rate.
  
• Home loan comparison calculator. This lets you compare the repayment plan for two loans side-by-side, based on the differences in interest rates, loan term and fees.

Who offers home loan calculators?

Nearly every home loan lender will offer a suite of home loan calculators to help you understand what you can expect when it comes time to actually apply for a loan.

Here are some lenders who offer one or more of the home loan calculators mentioned above:

• Suncorp
• HSBC
• IBA (currently undergoing updates)
• ING
• Bendigo Bank
• Ubank
• IMB
• Loans.com.au
• CUA
• Keystart
• Aussie Home Loans
• ANZ
• Commonwealth Bank
• NAB
• Westpac

Each lender has different criteria it uses to work out your loan details, so each calculator might have small differences that take their particular criteria into account. 

For example, each lender will have a different fee structure, which may include an application fee and ongoing account fees (you can avoid some of these fees by taking advantage of special offers). 

That said, the calculators are only meant to provide estimates and are not considered loan offers.

The point is to educate yourself and to determine if you’re ready to take the next steps – which in most cases will be to start the application process or speak to a home loan advisor. 

What else do you need to know about getting a home loan?

Using a home loan calculator is a good way to educate yourself about how home loans and repayments work, but they aren’t the only tools you’ll need to get a full picture of your borrowing power. 

For example, they don’t take your credit score or credit history into account, and these pieces of information play a huge role in a lender’s decision to actually approve the loan.

With a free Credit Simple account, you can access your credit score and your credit history any time you want. Having this level of insight will help you work out ways to improve your score or to identify any dodgy activity like identity theft. 

We also have a learning library where you can learn to prepare for and optimise your home loan. 

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As a young would-be home buyer, it can be tough getting a foot (or even just a big toe) on the property ladder. To help set Aussies up for success, CreditSimple.com.au spokesperson Emily Price provides her top tips for first time buyers to get started.

1. Use your score to leverage a better deal

“The first step is to check your score via CreditSimple.com.au. If it’s above 700, you’re an attractive customer and you should pick up the phone to see if you’re eligible for a deal tailored to your score.”

2. Avoid making multiple applications

“People often don’t realise that too many mortgage applications can negatively affect their credit score and act as a red flag to credit assessors. It’s always wise to do your homework, assess your options and be selective in the mortgages you apply for.”

3. Be aware of first homebuyer initiatives

“NSW and Victoria recently scrapped stamp duty for first homebuyers up to a certain value. Make sure you look into government initiatives designed to help first-time buyers get on the property ladder.”

4. Consider using a mortgage broker

“Taking out a home loan can be daunting, especially if it’s your first one. Consider talking to a mortgage broker to help you find the best loan for your situation.”

5. View saving as a long-term exercise!

“It’s always best to save as much of a deposit as you can to ensure you have the highest possible equity stake in your home and to minimise interest fees. But remember, for most people savings don’t just appear overnight, and chances are, you’ll need to budget effectively over a number of years before you’re in a position to buy.”

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It was something people used to take for granted: you save for deposit, you get yourself a mortgage, you find a modest little house and off you go: a property owner in Sydney, or Melbourne, or Launceston, or Townsville.

But how much does that picture line up with the reality these days? We’ve been looking at some recent media stories, and when you line them up you see many trends that suggest the dream could be slipping out of reach for many Australians.

1. A third of all private renters were long-term in 2013, up from 25 per cent two decades ago, according to the Australian Housing and Urban Research Institute
2. Data compiled by REST Industry Super estimates that by 2036 – one in four would retire without owning a home and would be forced to rely on other savings and investments. For a long time, many people have relied on their home for their retirement savings. If you’re renting and also not able to put anything aside in saving for retirement, your future could be looking meagre.
3. Older Australians already have an 85 per cent rate of home ownership, but the number of first-home-buyer has halved in the past 10 years, according to Australian Bureau of Statistics data.

Sorry young Australia, it’s not looking so great, is it? There are large questions this raises that we’ll look at another day, but for now, we just want to offer a collection of suggestions that might improve your odds a bit. You’re leaning into a headwind, but this might just help slipstream you a little bit.

Have a spending plan

That’s a budget, but if you think of it as spending plan it doesn’t feel like a torture device.

Spend within your means

Try to live in a ‘less is more’ way.

Set financial goals

Set baby steps such as a date when you want to be debt free, for example, and work back from that.

Start saving now

We know you think you earn nothing. But try anyway- give yourself a ten percent imaginary pay cut and see if you can live that, and start putting away the ten percent.

Pay all your bills

Pay them before they’re due to save the stress and keep your credit record squeaky clean.

Remember the consequences of a HECS-HELP loan

Set yourself limits so that you don’t have to waste years of your life paying it back.

Know the difference between good debt and ‘dumb’ debt

Put simply, good debt is debt that gets you ahead financially. Bad debt is the debt owed on the partying element of your student days, and money spent on anything that goes down in value such as TVs, mag wheels, the latest iPhone, and so on. By all means buy these things. But pay for them from short term savings.

Rent less house

Can you share with others? Is there a cheaper option? Rent is dead money.

The sooner you can save and buy a modest flat or apartment the better. Where there’s a will there is a way.  

Think big on the career front. Just like your money, set yourself a career plan. Find a mentor who can help you work through what a future in your industry looks like and have a strategy for how you’re going to get to the next step.

As a final word: you can do it. Choose the positive path and start by making one change at a time.

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