What is a discharge fee?

Understand what a mortgage discharge fee is, when it applies, and how it affects your home loan. Learn the costs, timing, and steps involved when closing your loan early or switching lenders.

When you close off your home loan account with the lender due to no longer owing them any money this is called a 'home loan discharge'. There are a few reasons that you might discharge your home loan:

  • Selling your home
  • Refinancing your home loan
  • Paying off the home loan in full
  • Removing a guarantor from your mortgage

What is the process of a home loan discharge?

  1. Inform your lender that you would like to discharge your mortgage
  2. Fill in the Discharge Authority form provided by the lender and return them.
  3. Next, your lender should prepare a Discharge Mortgage document. This document must be registered with the Land Titles office, your lender usually does this on your behalf.
  4. You will pay off your loan on settlement date, whether it be via a final payment or refinancing to a new lender
  5. Your home loan account will be closed

What is a discharge fee?

A discharge fee is charged by lenders, like an exit fee. This fee covers any legal and admin fees incurred by the lender when closing off your loan. This is amongst other fees payable to the Government. It is best to check with your lender how much the discharge fee is, as this figure will vary across different lenders.

However, because of our no fee promise, Unloan doesn’t charge any discharge fees. What’s more? We don’t charge annual, application, banking, account, transaction, or late fees! (Other third-party fees may apply. Government charges may apply. Your other lender may charge an exit fee when refinancing.)

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Calculations are not a loan approval. Applications are subject to credit approval, satisfactory security and minimum deposit requirements. Full terms and conditions will be set out in our loan offer, if an offer is made.

^Rates shown are inclusive of a 0.01% p.a. discount off our reference rate. On each anniversary of your loan’s settlement date, you will receive an additional discount of 0.01% per annum, up to a maximum discount of 0.30% per annum. For purchase loans with a Loan to Value Ratio (LVR) between 80.01% - 90% LVR, a lenders mortgage insurance (LMI) premium and higher interest rate apply. In some cases depending on the property’s location or type, LMI may also be required for LVR between 70.01% and 80%.

*Comparison rate is calculated on a $150,000 secured loan over a 25 year term. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.