What Is A Deferred Establishment Fee?

This is an email question from Lesley in Vic Park, What is a bank or lenders deferred establishment fee? A good question, lets have a look what they are.

A bank or lenders deferred establishment fee (DEF), is a fee that is charged if pay out your home loan (an example maybe if your refinancing your mortgage). All banks and lenders have different fee amounts, some are $0, some may start from $700 upwards. Some also too, may reduce or waive this fee, if you have had your current home loan for a certain period of time (eg. If your home loan is 4 years old, the fee might be waived).

It is important, if you are thinking about paying your home loan out, or refinancing, to know what this fee is. Some more non conforming home loans (like lo doc, or credit impaired mortgages) may have high deferred establishment fees, so if you have one of these type of loans and are thinking about refinancing, it is important to know what these fees are, as they can be thousands of dollars.

The deferred establishment fees are different to exit fees from a fixed rate mortgage. If you have a fixed rate mortgage, there may be other fees involved, have a read of the article Exit Fees On Fixed Rate Mortgages.

Banks or lenders can charge other fees too, if you are paying out or closing your current home loan. Some other fees may include a settlement booking fee (Can vary, but averages around $300), and government charges. The government charges can vary from state to state, but in Western Australia, the government charges (a mortgage registration, search and transfer registration fees) average around $300.

There are many things to consider, with exit fees from your mortgage. If you have any questions or comments, please leave below. If you would like more information about your mortgage, or like to use my services as a mortgage broker, please contact me anytime