Upfront Home Loan Fees Fall
A NSW Government move to ban exit fees has lead to upfront loan fees falling, savings for consumers and a more competitive home loan market. According to RateCity, the cost of upfront fees (or loan establishment fees) has dropped from an average of $707 in early 2011 to around $673 in mid-2012. The majority of variable home loans -- around 72 per cent -- still come with upfront fees, but it’s important that consumers realise it is a cost that can be avoided.
A number of lenders have scrapped upfront fees altogether, and with such a wide variation in fees and flexibility, it’s worth shopping around. Don’t forget that others may compensate for low initial costs by charging higher rates. Getting a hold of your comparison rate will vary according to the size of the loan, so make sure you ask a lender for this before making a final decision.