June RBA Announcement

Dear Client,

The RBA has today retained official interest rates at its historical low of 2.75%. The Board cited that recent data was consistent with an economy that was tracking slightly below trend and the foreign exchange rate has depreciated since the Board’s decision to reduce official rates at the last meeting. The Board judged that the financial conditions now in place will contribute to a strengthening growth over time.

While interest rates are at all-time lows, we have been helping many clients to take advantage of these rates. Our concern is the confusion regarding fees and charges with either acquiring a new loan or exiting an existing loan. This month’s article explains some of these fees and charges.

We also want to remind you about the importance of speaking with us BEFORE you make any new finance decisions.

There is currently a lot of media attention highlighting ‘getting a better deal’ by encouraging you to go directly to the banks to negotiate rates yourself. REMEMBER that it is often in the BANKS’ best interest to help you into a new loan and THEY WILL NOT tell you if another bank or institution has a better offer for you.

We see so many people who are set up with not only the wrong type of loan, but with the wrong structure as well – regardless of the rate.

We are never too busy to talk to you about your finance. Our role is to help you identify the finance type and structure that is best suited to your circumstances, while finding you a great rate as well. Too often we see people transferring their business to another institution but not necessarily ending up in a better finance situation due to heavy fees. They thought they were chasing a ‘good deal’ and didn’t want to ‘bother us’.

Please understand – we want to be ‘bothered’.

If we haven’t reviewed your finances in the last 12 months, we encourage you to call and explore the incredible range of low rates and offerings available across many financial institutions.

Coming into a new financial year is always a great time for your loan review.

We look forward to talking with you soon.

In your best interest
Quantum Investor

Main article


By law, all mortgages funded on or after 1 July 2011 will not include early exit fees. If your home loan was set up before July 2011 then you may still have significant exit fees.

Early exit fees were also known as deferred establishment fees, early termination fees, exit administration fees and break fees. They were commonly charged if you repaid or refinanced your loan within a predetermined period (usually the first three to five years) and were typically charged on variable home loans. In many instances the size of this exit fee did not equate to the true economic cost to the lender in establishing your loan.

The legislation was introduced to encourage lending institutions to be more transparent with their fees. Established fees are now  charged upfront allowing borrowers to more easily compare loan options increasing competition between the lenders.

As a result of the legislation, some lenders have reintroduced or increased upfront application fees, however these are now more reflective of the true cost of establishing a loan.

It is important to note that exit fees are different to those fees charged by a lender (more commonly known as penalty interest) as a result of breaking a fixed interest period loan.


As your mortgage consultant, we will explain and outline the costs you may still be charged when switching loans.

When switching loans, the required fees relate to the settling of your loan, removal of your existing mortgage and the establishment of a new loan and mortgage.

These costs may include:

  • legal fees,
  • settlement charges,
  • discharge fees,
  • lender’s mortgage insurance,
  • mortgage duty,
  • mortgage registration fee,
  • mortgage discharge fee,
  • valuation fees,
  • fixed rate penalty interest, and
  • application fees.

All these fees still apply.


These fees are further explained below:

Legal fees

These fees may relate to the cost of preparing your mortgage and loan documents or the discharge of your mortgage.


Settlement charges

This fee is to pay for your lender to attend your settlement. It may also be charged for an internal settlement.


Discharge fee

This administrative fee covers the lender’s cost of removing the mortgage registered on the title of your property. It is usually between $150 and $600.


Lender’s mortgage insurance

Normally a lender will require lender’s mortgage insurance if you are borrowing more than 80% of the value of the property.In most cases the underwriter will not transfer the insurance to a new lender and you will require a new insurance policy.


Mortgage duty

Mortgage duty applies in some states and is dependent on the purpose of the funds, for example if the loan is to secure financing an investment property.


Mortgage registration fee

This is a government charge to register a mortgage on the title. The mortgage remains in place until your loan is paid out in full or refinanced to a new lender.


Mortgage deregistration fee

This fee is usually charged to remove the mortgage registered on the title of your property.


Valuation fees

This fee may be charged by the new lender in assessing your new loan application.


Fixed rate penalty interest

This relates to the economic loss to the lender as a result of you breaking your fixed rate interest period.


Application fee

This relates to the cost of the lender in assessing your loan application and obtaining the necessary approvals.


These costs need to be taken into account if you are considering changing loans to take advantage of the lower interest rate environment.

Even though ‘exit fees’ no longer apply, these additional fees may outweigh the savings to be made by switching loans.

Whilst there are potentially some great financial savings to be made by changing loans, the decision needs to be well researched and considered.


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Email: info@quantuminvestor.com.au

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