Everything You Need to Know About Refinancing Fees

Application fees on a refinance can range from zero to over $600 depending on the lender.

Some lenders charge upfront application fees, while others build costs into higher rates or ongoing account-keeping fees. If you're refinancing to access a lower rate or release equity, these fees reduce your net benefit unless you account for them upfront.

What Application Fees Cover When You Refinance

Application fees cover the lender's cost of processing your refinance, including credit checks, document verification, and internal assessment. Some lenders itemise these as separate charges, while others bundle them into a single application or establishment fee. If you're switching lenders, you may also encounter discharge fees from your current lender, which typically sit between $150 and $400.

In our experience, most borrowers focus on the interest rate and overlook the upfront costs. A lender offering 0.20% lower than your current rate might still cost more in the first year if they charge $600 upfront and you're only saving $300 annually on interest.

How to Compare Total Costs Across Lenders

Add the application fee to the first year's interest and any ongoing account fees to get a true picture. Consider a borrower in Malvern East with a $500,000 loan refinancing to a rate 0.30% lower than their current variable rate. If the new lender charges a $600 application fee and the annual interest saving is approximately $1,500, the net benefit in year one is $900. If another lender offers 0.25% lower with no application fee, the net benefit is around $1,250 in the same period.

This calculation shifts if you're refinancing for reasons beyond rate, such as accessing equity for a deposit on an investment property or consolidating debts. The benefit of the refinance may justify a higher upfront fee if the features or loan structure deliver what you need.

When Lenders Waive Application Fees

Many lenders waive application fees during promotional periods or for borrowers with strong credit profiles and larger loan amounts. Borrowers refinancing loans above $400,000 in established suburbs like Malvern East often qualify for fee waivers without negotiation. Some lenders also waive fees if you take out both an owner-occupied and investment loan at the same time.

If you're coming off a fixed rate and your current lender isn't offering a competitive revert rate, it's worth checking whether other lenders will waive fees to win your business. Timing matters: promotional offers typically run for a few weeks and aren't advertised broadly.

Ongoing Fees That Outlast the Application Stage

Some lenders charge monthly account-keeping fees between $10 and $15, which add up to more than a one-off application fee over the life of the loan. If you're refinancing to access features like an offset account or redraw facility, check whether those features come with additional monthly costs. A loan with no application fee but a $15 monthly account fee costs $180 per year, which over five years is $900.

Other ongoing costs include annual package fees, which some lenders charge in exchange for rate discounts or bundled features. These typically range from $300 to $400 per year and can make sense if the rate discount exceeds the fee, but they're often overlooked during the initial comparison.

Property Valuation Fees and Who Pays Them

Most lenders require a valuation when you refinance, either a desktop assessment or a physical inspection. Desktop valuations are usually free or included in the application process. Physical valuations cost between $200 and $600 depending on the property type and location. In Malvern East, where properties often exceed $1.5 million, lenders sometimes require a physical valuation to confirm equity levels before approving the refinance.

Some lenders absorb the valuation cost as part of their fee waiver offer. Others pass it directly to you. If you're refinancing to release equity for a second purchase, the valuation fee becomes part of the cost of accessing that equity, so it's worth factoring into your overall budget alongside application fees and any ongoing costs.

How a Broker Reduces Your Out-of-Pocket Costs

Brokers have access to lender panels that include both retail and wholesale products, some of which carry lower or zero application fees. We regularly see scenarios where a borrower approaches a bank directly and is quoted a $600 application fee, then switches to a broker-only product from the same lender group with no fee and a similar rate.

Brokers also negotiate on your behalf during promotional windows and can structure the application to qualify for fee waivers based on loan size or product type. If you're refinancing in Malvern East and considering whether to consolidate other debts or access equity at the same time, a loan health check can clarify whether the upfront fees justify the long-term outcome.

Making the Decision With Full Cost Transparency

Refinancing should improve your position, whether that's through lower repayments, better loan features, or access to equity. Application fees are one part of the total cost, but they're often the most visible upfront. If a lender charges $600 to switch but saves you $2,000 per year on interest, the refinance pays for itself in four months. If the saving is only $400 per year, it takes 18 months to break even, and you need to be confident you'll stay with that lender long enough to realise the benefit.

Before committing, confirm what the fee covers, whether it can be waived, and what ongoing costs will apply once the loan settles. A refinancing decision based on rate alone often misses the full picture.

If you're considering a refinance and want to understand the total cost across lenders, call one of our team or book an appointment at a time that works for you.

Frequently Asked Questions