Application Fees

These are fees that are payable to the lender when you take out a loan. Application fees can range from $400 to more than $1,000, depending on the lender and type of loan.

This fee covers the banks costs of approving, documenting and settling your loan, which can include its administrative costs, legal's and valuation fees.

However, sometimes legal costs and valuation fees are not included in the application fee so make sure you know exactly what's covered by your loan's application fee, and what isn't.

Your Mortgage Broker may ask you to supply a cheque for the application fee (made payable to the lending institution) before the loan is submitted, as the broker will need to include the cheque with the completed loan application with some lenders. With other lenders this won't be necessary.

Some lenders will reduce their application fees if, for example, the borrower takes out a credit card, opens a bank account or otherwise gives further business to the lender. Temporarily (or conditionally) reduced and waived application fees are often used as a marketing tool in ad campaigns.

The application fee is usually refundable if your loan is declined, less any costs the bank has incurred in assessing your application. If this is not the case then look to your alternatives.