Most lenders don't charge an application fee when you refinance, but some do.
The fee itself is typically between $250 and $600, though a handful of lenders set it higher. When it's charged, it's collected upfront or at settlement. Some lenders call it an establishment fee or an upfront fee, but the function is identical: it covers the administrative cost of processing your application. Whether you pay it depends entirely on which lender you move to, not on your occupation or the loan amount you're refinancing.
Application Fees Versus Discharge Fees
Application fees are paid to your new lender. Discharge fees are paid to your existing lender when you leave. The discharge fee is typically between $300 and $500 and covers the administrative cost of releasing the mortgage over your property. Both fees can apply in the same refinance, which means you might pay one lender to leave and another lender to join. If your existing lender also charges a break cost because you're coming off a fixed rate early, that's a separate charge again.
Consider a registered nurse refinancing a $480,000 home loan six months before the fixed rate period ends. The discharge fee from the existing lender is $350. The new lender charges a $400 application fee. If the break cost on the fixed rate is $2,800, the total cost to refinance is $3,550 before conveyancing or valuation charges. That's why the rate difference needs to be meaningful enough to recover those costs within a reasonable period.
Which Lenders Charge Application Fees When Refinancing
Many of the major lenders don't charge an application fee for refinancing. Others do, and the fee structure changes periodically as lenders adjust their pricing. Some lenders waive the application fee during promotional periods or for specific loan products, particularly home loans for nurses under profession-based packages. When comparing refinance options, the application fee is one line item in a longer list that includes interest rates, ongoing fees, offset account access, and redraw conditions.
A mortgage broker for nurses will typically provide a cost comparison that shows application fees, discharge fees, and any other upfront charges across multiple lenders. That comparison should also show how long it takes to recover those costs based on the interest rate difference between your current loan and the new one.
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Ongoing Fees Matter More Than Application Fees
An application fee is a one-time charge. The annual package fee or monthly account-keeping fee on your new loan will cost you far more over time. Some lenders charge $395 per year for a package that includes fee-free offset accounts and rate discounts. Others charge no annual fee but levy a monthly account fee of $10 or $15. Over a five-year period, a $395 annual fee costs $1,975. A $15 monthly fee costs $900.
If a lender charges a $400 application fee but no ongoing fees, and another lender charges no application fee but $395 per year in package fees, the second lender will cost you more within the first two years. After five years, the second lender will have cost you $1,575 more in total fees, even though the application was notionally free. That calculation assumes no other fee differences and doesn't account for interest rate variations, which will usually have a larger impact than fees alone.
When a Higher Application Fee Is Worth Paying
Application fees are irrelevant if the interest rate or loan features deliver a measurable benefit. A lender charging a $500 application fee but offering an interest rate 0.30 percent lower than a lender with no application fee will save you thousands over the life of the loan, depending on your loan amount. On a $500,000 loan, a 0.30 percent rate difference saves roughly $1,500 per year in interest. The $500 application fee is recovered in four months.
The same logic applies when refinancing to access equity or consolidate debt into your mortgage. If the new lender charges an application fee but allows you to release equity without a separate top-up fee, or consolidate a car loan and credit card debt without additional charges, the upfront fee may be offset by the avoided costs elsewhere.
Refinance Cashback Offers and How They Work
Some lenders offer cashback payments to borrowers who refinance, typically between $2,000 and $4,000 depending on the loan amount. The cashback is paid after settlement, usually within 60 to 120 days, and is designed to offset the upfront costs of refinancing including application fees, discharge fees, and conveyancing. The cashback is not conditional on paying an application fee. Some lenders that offer cashback also charge an application fee, while others offer cashback with no application fee at all.
Cashback offers are time-limited and often come with conditions such as a minimum loan amount, a requirement to hold the loan for a minimum period (typically two to three years), and restrictions on loan type or purpose. If you refinance again or discharge the loan before the minimum period ends, the cashback may need to be repaid in full. The offer should be assessed alongside the interest rate, ongoing fees, and loan features rather than treated as the primary reason to refinance.
Application Fees When Refinancing Investment Loans
Application fees for investment loan refinancing are structured the same way as for owner-occupied refinancing. The fee, if charged, applies per application rather than per property. If you're refinancing multiple investment properties and consolidating them under a single lender, the application fee is typically charged once, though some lenders may charge per security if the loans are structured separately.
Midwives and nurses refinancing investment loans may also access LMI waivers through lenders like Westpac, St.George, or Bank of Melbourne, which allow borrowing up to 90 percent LVR without paying Lenders Mortgage Insurance, subject to a minimum income threshold of $90,000. These waivers apply to refinancing as well as new purchases, and the application fee is unaffected by whether the LMI waiver is used. For refinancing scenarios where you're releasing equity to fund a deposit on another property, a loan health check before applying will clarify your borrowing capacity and the cost structure across lenders.
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Frequently Asked Questions
Do I have to pay an application fee when I refinance my home loan?
Not always. Many lenders don't charge an application fee for refinancing, but some do. The fee is typically between $250 and $600 where it applies, and it's paid upfront or at settlement.
Is the application fee the same as the discharge fee?
No. The application fee is paid to your new lender when you refinance. The discharge fee is paid to your existing lender to release the mortgage on your property. Both fees can apply in the same refinance transaction.
Are refinance application fees tax deductible for investment loans?
Application fees for refinancing an investment loan are generally tax deductible, as they relate to the cost of obtaining finance for an income-producing property. You should confirm the tax treatment with your accountant based on your specific circumstances.
Do cashback offers cover the application fee?
Cashback offers are designed to offset upfront refinancing costs including application fees, discharge fees, and conveyancing, but the cashback is paid after settlement. Whether it fully covers those costs depends on the cashback amount and your total upfront expenses.
Do nurses pay lower application fees when refinancing?
No. Application fees are set by the lender and don't vary based on your occupation. However, some lenders waive application fees under profession-based packages, and nurses may access those packages depending on the lender's eligibility criteria.
