Mortgage fees you need to know
The interest rate is just one part of the cost of a mortgage. Understanding all the fees involved helps you budget accurately and compare lenders fairly.
Upfront costs when getting a mortgage
Application / establishment fee
Some lenders charge a one-off fee to set up your mortgage, typically $0–$700. Many NZ banks have waived this fee, but it's worth checking. Compare lender offerings on RatePal.
Valuation fee
The bank needs a registered valuation of the property. Cost: $600–$1,000 depending on property type and location. Some banks cover this, especially for refinancing customers.
Low-equity margin (LEM)
If your deposit is less than 20%, most banks add an extra 0.25%–1.00% to your interest rate. This can add thousands to your annual interest cost. The exact margin depends on your LVR tier.
Legal / solicitor fees
You'll need a solicitor or conveyancer for the property purchase. Budget $1,000–$2,500 for legal fees. If you're refinancing, the new bank sometimes covers this.
Ongoing and exit costs
Annual or monthly account fees
Rare in NZ for standard mortgages, but some products (especially offset or revolving credit) may have annual fees of $0–$250.
Break fee
If you repay or refinance a fixed-rate mortgage before the term ends, you may face a break fee. This varies hugely — from nothing to tens of thousands of dollars — depending on rate movements, your loan size, and remaining term.
Early repayment adjustment (ERA)
Similar to break fees, this compensates the bank when you make large unscheduled repayments on a fixed loan beyond the allowed annual limit.
Discharge fee
When you fully repay your mortgage or switch lenders, your bank charges a discharge fee (typically $100–$350) to remove their security interest from the property title.
Other property purchase costs
| Cost | Typical Range |
|---|---|
| Building inspection | $400–$800 |
| LIM report | $300–$500 |
| Title search | $20–$50 |
| Moving costs | $500–$3,000 |
| Insurance (contents + house) | $1,500–$4,000/year |
Frequently asked questions
What are the main fees involved in getting a mortgage in New Zealand?
Key mortgage fees include: application/establishment fees ($200–$400), valuation fees ($300–$600), legal/conveyancing fees ($800–$1,500), and LVR insurance (if you have less than 20% deposit). Ongoing fees may include account/annual fees ($0–$150/year) and redemption/break fees when exiting early.
What is an LEM fee and when do I pay it?
An LEM (Land Information Memorandum) fee is a property report showing title, zoning, and restrictions. It typically costs $200–$400 and is paid at the start of the mortgage process. Your lawyer usually arranges this on your behalf.
What is a break fee and when would I be charged it?
A break fee (Early Repayment Fee) is charged if you exit a fixed-rate mortgage before the term expires. It's calculated based on the difference between your fixed rate and the current market rate, the remaining loan balance, and the time remaining. Breaking a 5-year loan after 2 years could cost $5,000–$15,000+.
What is a discharge fee and when is it charged?
A discharge fee is charged by your lender when you fully repay and close your mortgage (typically $150–$300). Your lawyer may also charge legal fees for the discharge process. Plan for these costs in your final repayment.
Can I negotiate or waive mortgage fees?
Yes. Application and annual fees are often negotiable, especially with new borrowers or larger loans. Ask your lender to waive or reduce fees—many will, particularly if you're refinancing from a competitor. Always compare the all-in cost (rate + fees) across lenders, not just the headline rate.
Compare all-in mortgage costs
See application fees, rates, and estimates of total costs from all NZ lenders to find your best deal.