Let’s talk about monthly fees, also known as ongoing fees, loan management fees or administration fees.
A monthly fee on your renovation loan covers the cost of maintaining your loan and is charged on a regular basis. This monthly fee amount does not go towards repaying your loan principal.
Let’s do the maths
Even a small monthly fee of $10 adds up to $600 over 5 years, so it pays to consider all charges when comparing lenders.
Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and monthly fee into one percentage figure. In Australia, lenders are required to show a comparison rate when they advertise an interest rate.
It’s a good idea to check the comparison rate to better understand the loan’s true cost and then compare them to identify the best lender.