Mortgage Application Fees — What Australian Lenders Charge (2026)
A mortgage application fee (also called a “loan establishment fee,” “upfront fee” or “processing fee”) is charged by some lenders when you apply for a home loan. In 2026, the trend has been toward fewer upfront fees — many competitive lenders charge nothing to apply. However, some lenders still charge application fees of $300–$800 on certain loan products.
What Is a Mortgage Application Fee?
An application fee covers the cost of assessing your loan application, processing the documentation, ordering the property valuation and setting up the loan account. Not all lenders charge this — it depends on the lender and the loan product.
How Much Are Mortgage Application Fees?
| Fee Range | Typical Lender Type |
|---|---|
| $0 | Most online lenders, many major bank basic loans |
| $100–$250 | Some smaller lenders or specialist products |
| $300–$600 | Common for some bank products and package loans |
| $600–$995 | Higher-end; some specialist or non-conforming lenders |
For first home buyers: Many lenders waive or reduce the application fee as a promotional offering.
Types of Upfront Lender Fees
Application fees are just one type of upfront charge. Other fees charged at or before settlement include:
| Fee Type | Typical Amount | Notes |
|---|---|---|
| Application / establishment fee | $0–$800 | Charged by some lenders |
| Valuation fee | $0–$600 | Often waived for standard properties |
| Settlement fee | $150–$350 | For arranging settlement |
| Legal/documentation fee | $100–$250 | Preparing mortgage documents |
| Title search fee | $100–$200 | Government/legal cost; often included in conveyancing |
Total upfront lender costs (excluding LMI and government charges): $0–$2,000+ depending on lender.
The Big Four Banks — Application Fee Practices
The Big Four (CommBank, ANZ, Westpac, NAB) have moved toward eliminating upfront application fees on their standard variable and fixed rate products. However:
- Package loans from the Big Four typically have no application fee but charge an annual package fee ($300–$395/year)
- Basic / no-frills loans typically have no application fee and no annual fee
- Specialist or complex applications may attract fees not present on standard products
Online and Non-Bank Lenders
Online lenders (e.g., Athena, Unloan, Tic:Toc, Well Home Loans) and non-bank lenders (e.g., Pepper Money, Firstmac, Liberty) typically:
- No application fee
- No ongoing annual fee
- Offer competitive rates — sometimes lower than Big Four
Trade-off: Non-bank lenders may have less flexibility for complex situations (restructuring, bridging loans) and limited branch network.
Are Application Fees Negotiable?
Yes — particularly in a competitive market:
- Mortgage brokers can often negotiate fee waivers for clients, especially in high-volume applications
- Promotional periods often include fee waivers
- Asking directly sometimes results in a waiver — lenders value new customers and may absorb the fee
How to Factor Application Fees Into Your Loan Comparison
Application fees are a one-time cost. Over a 30-year loan, they are relatively minor. However:
| Loan A | Loan B |
|---|---|
| Rate: 5.99% p.a. | Rate: 6.10% p.a. |
| Application fee: $0 | Application fee: $0 |
| Annual fee: $0 | Annual fee: $0 |
| No application fee advantage | — |
If you plan to sell or refinance in 3–5 years, upfront fees matter more because you have fewer years over which to amortise them.
Rule of thumb: A $500 application fee on a $500,000 loan over 5 years = $100/year. Compare this to the interest rate difference between lenders — even a 0.05% rate difference = $250/year in interest savings. A better rate almost always outweighs a higher upfront fee.
The Comparison Rate — Does It Include Application Fees?
The comparison rate is designed to include the effect of upfront fees. It is calculated on a $150,000 loan over 25 years — which may not be representative of your loan.
For a $700,000 loan, a $500 application fee has a proportionally smaller effect on the comparison rate. For a $150,000 loan (the comparison rate basis), a $500 fee has a larger percentage impact.
Use comparison rates as a guide, not an absolute measure — always ask for the full fee schedule.
What Is Included in a Loan’s Key Facts Sheet?
The Key Facts Sheet is a standardised document that all home loan lenders must provide in Australia. It includes:
- Interest rate (variable or fixed)
- Comparison rate
- Upfront fees
- Ongoing fees
- Exit fees
- Total amount payable over the loan term
Request the Key Facts Sheet from any lender before proceeding — it is a standardised comparison tool.
Frequently Asked Questions
Are mortgage application fees tax deductible? For investment properties: upfront loan fees (including application fees) may be deductible over 5 years or the loan term — consult a registered tax agent. For owner-occupied homes: generally not deductible.
Can I add the application fee to my loan? Some lenders allow the application fee to be capitalised (added to the loan balance). This reduces upfront cash but means you pay interest on the fee for the loan term.
Do application fees apply when refinancing? Refinancing to a new lender may trigger a new application fee (if the new lender charges one) plus a discharge fee from your existing lender. Factor both into the cost of refinancing.
Related Guides
- Home Loan Costs and Fees in Australia
- Discharge Fees Explained
- Total Cost of Buying a House
- Mortgage Calculator
- Costs and Fees Hub
This article provides general information about mortgage application fees. Fees vary by lender and change regularly. Always request the Key Facts Sheet and full fee schedule from any lender before committing. For advice tailored to your situation, speak with a licensed mortgage broker or financial adviser. Find one through MoneySmart.