ING Direct latest lender to announce home loan fee increases
Aussie borrowers have been hammered with interest rate increases lately, but now there’s another cost for them to keep their eye on - home loan fees.
ING Direct recently notified its home loan customers that from 23 June 2017, the annual fee on Orange Advantage home loans will be increasing from $199 to $299. The notice gave no reason for the increase, but noted that the loan offers features such as an offset account and unlimited extra repayments and that the “Orange Advantage annual fee continues to be lower than most.”
There are 217 products in Mozo’s home loan database that have an ongoing fee. Of those, 115 have an annual or monthly service fee equal to $299 or less each year, and 102 products with an annual fee of $300 or more, putting the new ING Direct fee more or less squarely in the middle.
But the online lender is not alone in hiking up fees for borrowers - a number of lenders have increased or introduced fees on their home loan products this year, including:
- Heritage Bank increased the monthly fee on its Standard Variable and Fixed Home Loans from $5 to $8. It also increased the settlement fee from $100 to $150 and the discharge fee from $200 to $250 on all loans.
- P&N Bank increased the discharge fee from $245 to $350 on all home loans.
- Qudos Bank increased the discharge fee from $250 to $275 on all loans.
- Resi introduced a $120 annual fee on all loans.
“This is certainly something borrowers should be aware of,” said Mozo Data Manager Peter Marshall.
“It goes to show that when choosing a home loan, you can’t just look at one feature, like the interest rate. There are a number of aspects to consider, from the interest rate, to the fees, to what extra features are on offer.”
Marshall said borrowers can make use of the comparison rate, which takes into account both interest rate and fees, to get a more accurate idea of the true cost of a loan. And when considering the extra features on offer with a mortgage, it’s important to be realistic, he said.
“Features like an offset account or the ability to make extra repayments can save you a lot of money, but will you actually use them? Generally, the more features a home loan has, the more expensive it will be for the borrower. So it pays to take the time to find a loan that includes features you will use, but not those you won’t.”
The news on home loan fees is not all bad, however. Some lenders have also lowered or waived fees on their home loan products, so new borrowers may be able to snag a good deal. Fee waivers and reductions this year include:
- St.George, BankSA and Bank of Melbourne are waiving the $600 application fee on Basic Home Loans with P&I repayments.
- Bankwest is waiving the $695 application fee on its Equaliser Home Loan.
- iMortgage has reduced the discharge fee from $545 to $295 on all loans.
- Yellow Brick Road is currently waiving the $198 annual fee on its Empower Package home loan.
If you’re in the market for a home loan, be sure to take our mortgage comparison tool for a whirl to find some of the best deals around for your needs.