Most lenders charge between $200 and $600 to process a refinance application, though some waive the fee entirely if you meet certain conditions.
As a Tasmanian Government employee, the decision to refinance your home loan usually comes down to whether the rate saving or feature improvement justifies the upfront cost. Application fees sit alongside valuation fees, discharge fees from your current lender, and sometimes settlement fees from your new one. The total can reach $1,500 to $2,500 depending on the lender and your loan structure.
Application Fee Structures Across Lenders
Application fees cover the lender's cost to assess your loan, verify your employment and income, and prepare settlement documents. Some lenders charge a flat rate regardless of loan size. Others waive the fee if you borrow above a certain threshold or if you're moving from a fixed rate that's about to expire. A third group bundles the application fee into other costs, so the headline figure looks lower but the total doesn't change much.
In our experience, Tasmanian public sector borrowers often qualify for fee waivers through employment-based lending programs. These programs recognise stable income and lower credit risk, which means fewer administrative hurdles for the lender. If your current loan sits with a major bank that doesn't offer a waiver, switching to a lender with a public service focus can eliminate the application fee altogether.
When a $400 Fee Still Makes Sense
Consider a borrower with a $450,000 loan balance and three years left on a fixed rate sitting at 5.8 per cent. They've been contacted by their lender about refinancing to a variable rate that's currently lower. The application fee is $395, the valuation is $220, and the discharge fee from the old lender is $350. Total upfront cost: $965.
If the rate difference saves them $150 per month, the upfront cost is recovered in seven months. Over the remaining loan term, the rate saving compounds. The application fee becomes irrelevant once the benefit exceeds the cost by a meaningful margin. The question isn't whether the fee exists, it's whether the numbers still work after accounting for it.
Valuation Fees and When They're Avoidable
Valuation fees range from $150 to $300 for a standard residential property in Hobart or Launceston. Lenders use the valuation to confirm the property's current worth and calculate your loan-to-value ratio. Some lenders waive the valuation fee if your loan amount is below 80 per cent of the property's estimated value, relying instead on automated valuation models.
If you refinanced or purchased within the past two years and your loan-to-value ratio hasn't changed significantly, ask whether a desktop valuation is sufficient. This often costs half the price of a full inspection. Regional properties or those on larger blocks sometimes require a physical inspection regardless, which adds to the timeline as well as the cost.
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Discharge Fees From Your Current Lender
Your existing lender charges a discharge fee to release the mortgage over your property and prepare the necessary legal documents. This fee typically sits between $300 and $400 and isn't negotiable. It's an administrative cost, not a penalty, though it feels like one when you're moving to save money elsewhere.
Some borrowers coming off a fixed rate assume they can refinance without penalty once the fixed term ends. That's correct in terms of break costs, but the discharge fee still applies. Factor it into your total refinancing cost alongside the application and valuation fees. If your fixed rate is expiring soon, a loan health check can help you compare the total cost of staying versus switching.
Settlement Fees and Legal Costs
Your new lender may charge a settlement fee or legal fee to register the new mortgage. This ranges from $150 to $500 depending on whether the lender uses an internal team or external solicitors. Some lenders include this cost in the application fee, others list it separately.
If you're refinancing to access equity for an investment property or renovation, the settlement process involves additional steps. The lender registers a new mortgage for the increased loan amount, and you may need to provide updated contracts or quotes to justify the drawdown. Legal costs increase slightly in these situations, though the process itself doesn't change.
Ongoing Fees That Matter More Than Application Fees
Application fees are a one-off cost. Monthly account-keeping fees, annual package fees, and offset account fees recur for the life of the loan. A lender that charges no application fee but $15 per month in account-keeping fees will cost you $5,400 over 30 years. A lender that charges a $400 application fee but no ongoing fees saves you $5,000 in the long run.
Check whether your new loan includes an offset account at no additional cost. Tasmanian public sector employees with stable salaries often benefit from parking their pay in an offset account, reducing the interest charged without locking funds into the loan itself. If the offset account carries a $10 monthly fee, calculate whether the interest saving exceeds $120 per year. If not, a redraw facility may suit your situation without the ongoing cost.
How to Confirm the Total Cost Before Applying
Request a written breakdown of all fees from your broker or lender before you proceed. This should include the application fee, valuation fee, settlement fee, and any government charges such as mortgage registration fees. In Tasmania, mortgage registration costs around $190 and applies whether you're refinancing or purchasing.
If your current lender offers to match the rate you've found elsewhere, ask whether they'll waive the application fee for an internal rate switch. This eliminates the discharge fee and valuation fee, though you'll need to confirm the new rate in writing and check that it applies to your full loan balance, not just a portion of it. Internal switches can work if the rate is genuinely comparable, but lenders often reserve their most competitive pricing for new customers.
Public sector borrowers in Tasmania often have access to lending programs that reduce or eliminate upfront costs. These programs vary by lender, so it's worth comparing what's available through a broker who works specifically with Tasmanian Government employees. If the application fee is $400 but the waiver saves you that amount, your refinancing cost drops by a quarter before you've even looked at the rate.
Call one of our team or book an appointment at a time that works for you. We'll provide a written breakdown of all refinancing costs upfront, confirm which fees can be waived, and calculate whether the numbers still support a move based on your loan balance and rate difference.
Frequently Asked Questions
What is the typical application fee when refinancing a home loan?
Most lenders charge between $200 and $600 to process a refinance application, though some waive the fee entirely if you meet certain borrowing thresholds or work in the public sector. The fee covers the lender's cost to assess your loan, verify your income, and prepare settlement documents.
Can Tasmanian Government employees get refinancing fees waived?
Many lenders offer fee waivers for public sector employees through employment-based lending programs. These programs recognise stable income and lower credit risk, which can eliminate application fees and sometimes reduce valuation or settlement costs as well.
What other costs apply when refinancing besides the application fee?
You'll typically pay a valuation fee of $150 to $300, a discharge fee of $300 to $400 to your current lender, and a settlement or legal fee of $150 to $500 to your new lender. In Tasmania, mortgage registration costs around $190 and applies to all refinances.
How do I know if refinancing is worth the upfront cost?
Calculate how many months it takes for your rate saving to exceed the total upfront cost. If a refinance saves you $150 per month and costs $965 upfront, you recover the cost in seven months and benefit from the saving for the remainder of the loan term.
Should I focus more on application fees or ongoing fees when refinancing?
Ongoing fees such as monthly account-keeping fees or annual package fees cost far more over the life of the loan than a one-off application fee. A $15 monthly fee adds up to $5,400 over 30 years, which exceeds most application fees many times over.
