Home Loan Costs and Fees: What Landscapers Actually Pay

You'll pay more than just the interest rate when you take out a home loan.

The actual cost of borrowing includes upfront charges, ongoing account fees, and potential exit costs that can add thousands to what you hand over. For landscapers running their own business, understanding these costs matters because your income structure already puts you in a different box to wage earners when lenders assess your application.

Application and Establishment Fees

Most lenders charge between $0 and $900 to process your home loan application and set up the account. This covers credit checks, property valuations, and administrative work. Some lenders waive this fee entirely, while others bundle it into your loan amount so you're paying interest on it over the life of the mortgage.

Consider a landscaper applying for a $450,000 loan with an $800 establishment fee. If you capitalise that fee into the loan at a variable rate, you'll pay interest on that $800 for 30 years. Paying it upfront saves you money long term, but only if you've got the cash available without draining your business working capital.

When you're self-employed as a landscaper, lenders often request additional documentation like two years of tax returns, business financials, and ABN verification. Some lenders charge extra for this assessment, typically $200 to $400 on top of standard application fees.

Lenders Mortgage Insurance: The Big One

Lenders Mortgage Insurance kicks in when your deposit is less than 20 percent of the property value. This protects the lender if you default, and you pay for it. LMI can range from a few thousand dollars to over $30,000 depending on your loan amount and deposit size.

A landscaper buying a property for $550,000 with a 10 percent deposit ($55,000) would borrow $495,000. The loan to value ratio sits at 90 percent, triggering LMI of roughly $17,000 to $21,000 depending on the lender. That's a substantial chunk that gets added to your loan unless you pay it upfront.

Some lenders offer LMI waivers for tradies in specific circumstances, particularly if you've held your ABN for several years and show solid income. Others provide discounted LMI rates. The variation between lenders can mean a difference of several thousand dollars on the same loan scenario.

Ongoing Account and Feature Fees

Variable rate home loans typically charge annual package fees between $0 and $395. This covers account maintenance and access to features like an offset account or redraw facility. Fixed rate loans usually don't charge annual fees, but they lack the flexibility of redraws and offsets while you're locked in.

An offset account can save you thousands in interest over time. If you're running a landscaping business with seasonal cash flow, parking $20,000 to $40,000 in an offset during your busy months reduces the amount you're charged interest on. That saving compounds over the loan term. The $395 annual fee pays for itself quickly when you're offsetting significant amounts.

Some lenders charge monthly account keeping fees of $10 to $15. Over a 30-year loan, that's $3,600 to $5,400 you're paying just to have the account open. Always factor this into your home loan rates comparison.

Valuation and Settlement Costs

The lender arranges a property valuation before approving your loan, and you pay for it. Valuations cost between $200 and $600 depending on the property type and location. Some lenders include this in their application fee, others charge it separately.

You'll also pay settlement fees, typically $300 to $800, which cover the legal and administrative work of transferring the property title and registering the mortgage. Your solicitor or conveyancer handles this, and their professional fees sit on top at $1,200 to $2,500.

Break Costs on Fixed Rate Home Loans

Fixed interest rate home loans lock in your rate for one to five years. If you need to exit early because you're selling, refinancing, or paying down the loan faster than expected, the lender charges break costs. These can run into tens of thousands of dollars if rates have dropped since you fixed.

Break costs get calculated based on the difference between your fixed rate and the current wholesale rate the lender can now lend that money at, multiplied by the remaining fixed term. If you fixed at 5.5 percent for three years and rates have since dropped to 4.5 percent, and you want to break with two years left, you'll pay a break cost that compensates the lender for the lost interest income.

Landscapers who secure a large commercial project might want to pay down their mortgage faster than anticipated. If you're on a fixed rate without the ability to make extra repayments, you'll wear the break costs. A split loan where part is fixed and part is variable gives you the option to pay extra on the variable portion without penalties.

Discharge Fees and Exit Costs

When you pay off your home loan or refinance to another lender, your current lender charges a discharge fee to remove the mortgage from the property title. This typically sits between $300 and $500. Some lenders also charge an exit fee, though these are less common now.

If you're considering home loan refinancing to access equity for a work vehicle or equipment, factor in these exit costs from your current lender plus the application and establishment fees from the new one. The interest rate saving needs to outweigh the cost of switching.

Tradie Home Loans works with landscapers across Australia to find loan structures that match how your business actually operates. Call one of our team or book an appointment at a time that works for you.

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