The Costs of Refinancing a Loan

Refinancing a mortgage is a great way to save money through lower interest rates and consolidating all your debt into a single monthly payment. However, there are also costs involved which need to be carefully weighed against the benefits of refinancing.

The fees will vary depending on what your current loan terms are and what the new lender charges. Not all lenders charge the same amount but below are common fees separated by who charges them.

Current Lender

The exact costs for each of these fees will vary. Before going through the process, it’s important to know what these fees are.

  • Discharge fee – Also called exit fees, early repayment fees, or deferred establishment fees, these costs apply when you refinance to a new lender. These fees are standard in the industry but not all lenders charge them.
  • Mortgage registration fee – This is a set fee that is paid to the State Government when a new mortgage is registered. This is generally paid on your behalf by the lender.
  • New stamp duty – If you borrow more than the original loan amount, then you may be subject to a stamp duty fee. The exact amount depends on the size of the loan and the state the mortgage resides in.

New Lender

In addition to the fees that your current lender will charge, your new lender will also charge a range of fees. Some of these costs may or may not be applicable to you.

  • Loan application fee – This is the fee you pay when applying for a new loan and covers the application processing costs. The fee varies depending on the lender and some may even waive it to get your business.
  • Valuation fee – Before you can qualify for a mortgage refinance, professionals evaluations on your property need to be performed first.
  • Settlement fee – For your current loan, your new lender may charge a fee to settle the remaining balance. This may also include other legal fees for settling the loan.

While the fees vary, the total cost is typically between $500 to $2,000. However, refinancing your mortgage can actually save you more money in the long term but all costs and benefits should be carefully calculated.


* The information contained in this website should not be taken as constituting personal advice. We recommend that you seek professional assistance before acting upon any information provided or linked on this web site.

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