Do you know what you're paying in loan costs and fees?

Most maxillofacial surgeons focus on the interest rate when comparing home loan options, but the fees attached to a loan can add thousands to your costs over time.

Lenders structure fees differently depending on the product, and some charge upfront application fees while others recover costs through ongoing monthly account charges or higher exit penalties. When you're borrowing significant amounts, often against investment properties or upgrading to a larger principal place of residence, those differences compound.

Application and establishment fees vary by lender and product type

Application fees cover the lender's cost of processing your loan and typically range from zero to around $600. Some lenders waive this fee entirely, while others charge a flat rate regardless of the loan amount. Establishment fees, sometimes called upfront fees, cover the lender's administrative costs and legal work required to set up the loan. These can range from a few hundred dollars to over $1,000 depending on the lender and whether you're accessing a standard home loan or a more specialised product.

Consider a maxillofacial surgeon refinancing an investment property while also increasing the loan amount to fund a renovation on their owner-occupied home. If the lender charges a $600 application fee and an $800 establishment fee, that's $1,400 in upfront costs before a single repayment is made. Some lenders offer fee-free packages, but these often come with a higher ongoing annual fee or a slightly higher interest rate, so the overall cost needs to be compared across the life of the loan.

Ongoing account fees add up over the loan term

Many lenders charge monthly or annual account-keeping fees, which can range from $10 per month to $400 per year. Some premium packages with features like linked offset accounts or rate discounts include these fees as part of the package, while others charge them separately.

If you're paying $15 per month in account fees, that's $180 per year or $5,400 over a 30-year loan term. When you're managing multiple properties or a split loan structure, these charges can double or triple. We regularly see maxillofacial surgeons who have opted for a loan with a slightly higher ongoing fee because it includes an offset account and portability, which saves them far more in interest and gives them flexibility when relocating between hospitals or practices.

Discharge and exit fees apply when you close or refinance a loan

Discharge fees cover the lender's administrative and legal costs when you pay out a loan or refinance to another lender. These typically range from $150 to $400. Exit fees, which some lenders still charge on older loans, are designed to recover costs if you leave the loan early. Most new loans no longer include exit fees, but if you're refinancing an older product, it's worth checking your loan documents.

In a scenario where a maxillofacial surgeon is refinancing from an older variable rate loan to a split rate structure with better features, the discharge fee is often offset by the lower ongoing costs and improved rate. However, if you're switching lenders frequently to chase small rate differences, discharge fees can erode any saving.

Break costs on fixed rate loans depend on rate movements and timing

If you're locked into a fixed interest rate and need to exit the loan early, break costs can run into the tens of thousands. These costs are calculated based on the difference between your fixed rate and the current wholesale rate the lender can achieve in the market. If rates have fallen since you fixed, the break cost will be higher because the lender loses the margin they expected to earn over the remainder of the fixed period.

As an example, a maxillofacial surgeon who fixed a $900,000 loan at 4.5 per cent for five years and then needs to sell the property two years into the fixed term could face break costs of $15,000 or more, depending on how far rates have dropped. Some lenders allow you to port the fixed loan to a new property, which avoids break costs entirely. This is particularly useful for maxillofacial surgeons who relocate for career advancement or move between public and private practice settings. If portability is important to you, it's worth confirming the lender's policy before you fix.

Lenders Mortgage Insurance is a one-off cost for loans above 80 per cent LVR

If your loan to value ratio exceeds 80 per cent, most lenders require you to pay Lenders Mortgage Insurance. This is a one-off premium that protects the lender if you default, and it can range from a few thousand dollars to over $30,000 depending on your deposit size and loan amount. Some lenders offer LMI waivers for medical professionals, including maxillofacial surgeons, which can save significant upfront costs and preserve your capital for other investments or practice expansion.

LMI is typically capitalised into the loan, so while you're not paying it in cash at settlement, you are paying interest on it over the life of the loan. When comparing loan options, factor in whether the lender offers an LMI waiver and how that affects your overall borrowing capacity and cash position.

Offset account fees and package fees depend on the loan structure

Many lenders bundle features like offset accounts, redraw facilities, and rate discounts into a package that charges an annual fee, usually between $300 and $400. Other lenders offer offset accounts with no additional fee, but the base interest rate may be slightly higher. If you're using an offset account actively and parking your operating income or surplus cash there, the interest saved will typically outweigh the package fee.

For maxillofacial surgeons managing both personal and investment loans, a linked offset account can reduce taxable income on the owner-occupied loan while preserving the tax-deductible interest on the investment loan. Understanding the fee structure and how it interacts with your overall loan setup is part of structuring the loan correctly from the outset. If you're considering refinancing, comparing package fees and the included features is just as important as comparing the headline rate.

Valuation and settlement fees are typically paid at settlement

Lenders usually require a valuation before approving a loan, and the cost ranges from $200 to $600 depending on the property type and location. Settlement fees, which cover the lender's legal costs to finalise the loan, are typically between $200 and $400. These are usually deducted from your loan proceeds at settlement, so they don't require an upfront cash payment, but they do reduce the amount you receive.

If you're purchasing a property interstate or in a regional area, valuation costs may be higher due to travel or the need for a specialist valuer. Some lenders will waive valuation fees as part of a promotional offer, but these are less common on larger loan amounts or investment properties.

Rate discount criteria and how they affect ongoing costs

Many lenders offer rate discounts based on your loan to value ratio, loan amount, or whether you have an existing relationship with the bank. These discounts can range from 0.10 per cent to 0.70 per cent off the standard variable rate. A 0.50 per cent discount on a $1,000,000 loan saves you around $5,000 per year in interest, which far outweighs most fee structures.

We regularly work with maxillofacial surgeons who qualify for professional package discounts or tiered rate reductions based on the size of their loan. These discounts are often negotiable, and understanding what you qualify for before you apply gives you a clearer picture of the true cost of the loan. If you're holding multiple loans with the same lender, you may also qualify for portfolio discounts, which reduce the rate across all facilities.

Call one of our team or book an appointment at a time that works for you. We'll compare the full fee structure across lenders that work with maxillofacial surgeons and help you structure your loan to minimise costs while retaining the flexibility you need.

Frequently Asked Questions