Home loans with no discharge fees

author-avatar By on March 09, 2021
Home loans with no discharge fees

If you’re coming to the end of your home loan the last thing you want is to be stung with another cost.

Discharge fees can leave a sour taste in your mouth, given you’re handing over more of your money to the lender after years or even decades of already doing so.

If this is a fee you’d rather avoid, Savings.com.au has compiled a list of home loans that have no discharge fees.

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.


Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 19, 2021. View disclaimer.


What is a discharge fee?

A discharge fee, also known as a settlement or termination fee, refers to a fee a lender may charge you to cover the cost of wrapping up your loan. Completing a loan requires paperwork and labour from the lender, which you may be required to reimburse them for. These fees typically range anywhere from $150 to $400. Each of the big four charges a $350 discharge fee, except ANZ, which charges $320 at the time of writing.


Home loans with no discharge fees

The table below shows home loans with some of the lowest interest rates on the market that also have no discharge fees:

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*
  • Lower your rate the more you pay off your loan
  • Automatic rate match
  • No on-going fees
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*
VariableMore details

Smart Home Loan (Principal and Interest) (LVR < 80%)

VariableMore details

Discount Offer Variable Home Loan OO P&I (LVR < 80%)

VariableMore details

Savvy First Home Buyer Loan (Principal and Interest) (New Customer)

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 1yr

  • Fast turnaround times, can meet 30-day settlement
  • No ongoing fees
  • Extra repayments + redraw services
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 1yr

  • Fast turnaround times, can meet 30-day settlement
  • No ongoing fees
  • Extra repayments + redraw services

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of October 19, 2021. View disclaimer.


Other exit costs you may incur

A discharge fee falls under the umbrella of home loan exit fees. Exit fees were banned by the Gillard Government on 1 July 2011, but they can still be charged if you took out your home loan prior to this. Given home loans can last for as long as 30 years, you may want to double-check with your lender if you will be subject to them.

If you pay off your home loan early you may also be subject to early exit fees, also known as early termination, early discharge, deferred establishment, or deferred application fees. These are charged to cover the cost of the loss the lender will incur from finishing up your loan early. These can be costly and are generally best avoided, so speak to your lender about how much they might be or check the terms and conditions of the loan.

Breaking a fixed-rate mortgage, either by paying it off early or refinancing, is also an exit cost you may incur. These can be even more costly than early exit fees, often costing thousands of dollars, and the advantages of breaking the fixed loan won’t always outweigh the disadvantages.

See a complete list of home loan fees you can be charged here.


Savings.com.au’s two cents

In the grand scheme of a home loan, discharge fees are unlikely to break the bank, as a few hundred dollars is very little compared to the hundreds of thousands a mortgage can cost.

While it's great if you find a mortgage that won’t charge you one, it should be pretty far down on the list of things to look at when shopping between lenders. Always be on the lookout for a low-interest rate, features you may want, and low or zero ongoing costs. A $0 discharge fee should be a bonus.


Photo by Roberto Nickson on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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