Property Purchase
Property Loan Fees Explained
5 min read- Finance Guide
- Updated 2026
Quick answer
High LVR loans can trigger extra borrowing costs
80% LVR Threshold
Above 80% — LMI may apply and total loan cost can rise
- Upfront fees Application, valuation, legal
- Ongoing fees Package or account charges
- Possible extra cost LMI on higher LVR loans
- Exit costs Discharge or break fees may apply
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Detailed explanation
Property loan fees are not just one line item. They usually include lender charges connected to approving and maintaining the loan, transaction costs linked to completing the purchase, and extra costs that can apply in higher risk or more specialised scenarios. A proper comparison looks beyond the headline interest rate and considers the comparison rate, LMI exposure, government charges, loan feature fees and any exit costs that may appear later.
Core parts of a property loan
Upfront lender fees
Application, settlement, valuation and document related charges
Government charges
Transfer duty, registration fees and state based duties
Ongoing fees
Package, account or feature fees over the life of the loan
Risk based costs
LMI or specialised pricing where lender risk is higher
Optional features
Offset, redraw or bundled package costs may apply
Exit costs
Discharge fees and fixed rate break costs in some scenarios
What drives
loan fees
-
LVR is one of the biggest pricing triggers in residential lending
-
Loans above 80 percent LVR may attract LMI, which is usually a one off cost
-
Loan features such as offset accounts can add annual or monthly fees
-
Fixed loans can create extra cost if repaid or changed before the fixed term ends
-
Some purchase costs sit outside the loan itself but still affect total cash required
Common fee categories
-
Application or establishment fees for setting up the loan
-
Valuation fees where the lender needs an independent property assessment
-
Settlement, legal or document processing charges
-
Annual package or account keeping fees on some loan products
-
Government charges such as transfer duty and registration fees
-
Exit charges such as discharge fees or fixed rate break costs
How costs usually scale
-
Base loan costs Lower risk loans may avoid LMI and major risk loading
Core costs only -
Higher LVR lending LMI may apply and total loan cost can rise sharply
Extra cost likely -
Special scenarios Fixed breaks, non standard security or foreign buyer duties can add cost
More variables
Need Help Understanding Loan Costs?
How the cost stack usually unfolds
When borrowers price up a purchase loan, the fee picture usually becomes clearer in this order:
-
01. Borrower compares interest rates, comparison rates and key loan features
-
02. Expected cash required is estimated including deposit and purchase costs
-
03. Full application is submitted and lender fees become more specific
-
04. Lender assesses the deal and may charge or confirm valuation requirements
-
05. Formal approval sets out loan structure, conditions and relevant fees
-
06. Loan documents are checked for package costs, offset fees and break conditions
-
07. Settlement brings in government charges, legal costs and registration fees
-
08. Ongoing loan management begins and future discharge or break costs remain relevant
Common Problems
Fees become a problem when borrowers focus only on the interest rate and miss the wider borrowing cost. The main issues are usually hidden extras, higher LVR charges and exit costs that were not understood at the start.
Upfront cash needed is higher than expected
The loan may be approved, but the borrower later realises the purchase also involves transfer duty, legal work, registration costs and possible inspection fees.
Possible solutions include:
- Allow for both loan fees
and property purchase costs
- Check state based duty
exposure before committing
- Keep a buffer for
valuation or legal variations
- Model the full cash to
complete, not just the deposit
LMI makes the loan far more expensive
A higher LVR can add a significant one off insurance cost that protects the lender rather than the borrower.
Possible solutions include:
- Increase the
deposit where possible
- Consider using equity from
another property
- Review lender policy around
LMI capitalisation
- Test different purchase
prices before signing
Exit or feature fees are missed at the start
Borrowers sometimes choose a product for its headline rate, then later discover package fees, offset costs or fixed rate break risks.
Possible solutions include:
- Read the schedule of fees
carefully
- Compare the comparison rate
as well as the interest rate
- Check whether offset or redraw
actually justifies the cost
- Understand discharge and fixed rate
break conditions early
Steps To Get Finance
Step
01
Estimate the full purchase budget including lender fees and government charges.
Step
02
Compare rates, comparison rates and loan features side by side.
Step
03
Check whether the proposed deposit keeps the LVR below major cost triggers.
Step
04
Submit the application and confirm valuation, legal and settlement costs.
Step
05
Review the formal approval and fee schedule before signing loan documents.
Step
06
Complete settlement, then monitor ongoing fees, package costs and exit terms.
Speak With A Property Loan Specialist
Property loan costs can vary more than many borrowers expect, even when the interest rates look similar on the surface.
A specialist can help separate lender fees from broader purchase costs and show which loan structures may be more cost effective.
Speak with a finance specialist about loan fees, borrowing costs and purchase funding.
Submit the short form below and a property loan specialist can review the likely cost structure, explain key fees and discuss suitable funding options.
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