Find out how much you could borrow with our calculator.

Dreaming of purchasing a new home?

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When you apply for a home loan, it's good to be aware of the upfront fees and charges so you're not caught off-guard. Many of these extra costs can be avoided or negotiated out of your loan contract by your Home Loan Specialist and help save you a pretty penny. 

## What are the upfront costs of a home loan?

Before you get a home loan, there are a few upfront costs that you may need to prepare for and take into account when budgeting to buy a home. These may include:

- __Deposit__ — If you're purchasing a property, this is the big one. [Your deposit](https://www.lendi.com.au/guides/home-loan-deposit/) is a percentage of the purchase price. Many buyers aim to save at least 20% of the property's purchase price in order to avoid paying Lenders Mortgage Insurance. It's always beneficial to put up the largest deposit you can reasonably afford so to lower your [loan to value ratio](https://www.lendi.com.au/guides/lvr/) (LVR). From the lender’s perspective, a low LVR lowers your risk as a borrower and strengthen your borrowing power.
- __Application or establishment fee__ — A one-off payment to your lender is usually required to establish a home loan. Depending on your lender, you can sometimes negotiate to avoid this fee.
- __Lenders Mortgage Insurance (LMI)__ — If your deposit is less than 20% of the property's purchase price, [you may be required to pay LMI](https://www.lendi.com.au/guides/lmi/). It's important to remember that this insurance only protects the lender in case you fail to make your home loan repayments. Use our [LMI calculator here](https://www.lendi.com.au/calculators/home-loans/lmi-calculator/). 
- __Stamp duty / transfer duty__ — You will need to pay this state tax at a rate according to the property value when you purchase a home. Depending on your state or territory, you may be able to avoid paying this fee if the property is worth less than $600,000. Read our guide to [stamp duty here](https://www.lendi.com.au/home-loans/stamp-duty/). 
- __Legal and conveyance fees__ — When purchasing a property, you'll typically need a solicitor or conveyancer to help review contract and the title transfer.
- __Building inspection__ — A qualified building inspector will assess the property for safety and maintenance issues.
- __Foreign buyer surcharge__ — If you are a foreign buyer in Australia, you will need to pay surcharge purchaser duty and surcharge land tax.
- __Moving and cleaning costs__ — You may want to shop around and get quotes for these services that can help make the move into your new home easier.

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## How much will my repayments cost?

The terms of your home loan determine the [repayment amount](https://www.lendi.com.au/guides/home-loan-repayment/) you'll be required to pay each month. This depends on a number of factors including your interest rate, your loan amount and whether your loan is:

- A principal and interest or interest-only loan
- Fixed rate or variable rate
- Repaid over a short or longer period
- For your own home / Investment home

Use a repayment calculator to get an estimate of how much you'll need to repay each month. With an estimate, you can find it easier to budget your daily expenses, and start better saving habits to help pay off your loan faster.

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With the sizeable amount that you have to repay, you’ll certainly want to find ways to reduce the interest charged over the life of the loan. Your options usually involve making sure you always have a competitive interest rate and making extra repayments to reduce the interest charged against the loan balance. Using a redraw facility or an offset account can make your extra repayments really count. These loan features can come with fees, along with other ongoing costs.

![woman-calculating-finances](//images.ctfassets.net/o2gysnvd04sg/7h6FFIUesCM7iWwdrLmXMh/4dbefa2b7a6203df0d8c71c802c1f1d4/woman-calculating-finances.jpg)

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## What are the ongoing costs of a home loan?

Along with your monthly repayments, you may also incur ongoing costs attached to your home loan. Some ongoing costs include:

- __Redraw facility fees__ — Some lenders may charge a fee for withdrawing funds from a [redraw facility](https://www.lendi.com.au/guides/home-loan-redraw-facility/). 
- __Offset account fee__ — Many lenders charge an annual fee for an [offset account](https://www.lendi.com.au/guides/offset-account/).
- __Break fees__ — If you refinance or switch loans during a [fixed-rate term](https://www.lendi.com.au/guides/fixed-rate-home-loan/), break fees can apply to you.
- __Late payment fee / default fee__ — This is a penalty that is incurred when you make a required payment after the due date. How this is charged will depend on the lender. 

## What are the hidden costs of a home loan?

When adding up all your costs, don’t forget to ask your Home Loan Specialist about the often overlooked fees or costs that may apply to you. This could make a difference when you’re managing your repayments.

Some overlooked fees may include:

- __Early exit fees__ — When a home loan is repaid within a certain period, this fee may be charged by the lender.
- __Discharge fees__ — Some lenders may charge this when the home loan is paid out in full.
- __Property valuation fees__ — Many lenders will require a property valuation be completed when buying a new property and refinancing.

By knowing all the different costs that apply to you, you can more easily plan and manage your repayments. 

## How to avoid these extra costs
A number of these fees such as loan setup fees can be avoided with the help of a Home Loan Specialist to negotiate on your behalf. Find out how to avoid these fees by [chatting with an expert](https://www.lendi.com.au/book-appointment/) now. 

## Chat to an expert
Our Home Loan Specialists are always here to answer your home loan questions. Choose a time to chat with one of [our experts](https://www.lendi.com.au/book-appointment/). 

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