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Save $938 on your home loan | Dollar Saver tip #51

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Save: $938

Tip overview:

By choosing a home loan without fees, you could save $938 in your first year and at least $380 for each year after.

Haven't given much thought to the fees on your home loan? Most people don't – but if you look at the bank's comparison rate, you might find you're paying more in fees than you need to.

Rebecca Pike here, one of Finder's home loans experts. Many banks and lenders offer $0 fees on certain home loans. They have less bells and whistles, but if all you need is a basic loan, there's no point in paying extra. Whether you're looking to refinance or take out a new home loan, big savings are available.

Did you know?

Home loan application fees alone can cost between $200 and $700, then ongoing fees are often $400 every year thereafter.

Here are some examples of fees you might pay as part of your home loan (not including those pesky compulsory legal and government charges):

  1. Application fee - when you apply for finance
  2. Account-keeping fees - charged every month or year
  3. Offset account fee - usually around $10/month
  4. Redraw fees - see offset above

According to Finder's database, application fees are an average of $517, with average redraw fee of $41 and $260 in yearly service fees.

If you take out a new home loan with service fees, $10 offset account fee and you redrew money from your loan just once in that first year, you could spend $938 just in fees – on top of your home loan payments.

You'd pay at least $380 on average each year after that as well.

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