The costs of remortgaging?

There are costs involved in remortgaging, but they will probably be less than you think. They can be included in your new mortgage amount and will be tiny compared to your saving if you are getting a good reduction on your interest rate.

The main expenses are mortgage broker fees, bond registration fees, bond cancellation fees, and initiation fees. We have detailed each of these below:

Bond registration (attorney) costs - This is the cost of the attorney to register your new mortgage. They receive an instruction from the bank that has approved your new mortgage, draw up the paperwork, do FICA checks and lodge at the Deeds office. They simultaneously lodge with the attorneys acting as your previous lenders cancellation attorneys so your home loan just moves from one bank to another. Your attorney should be in touch with you within a week of your new home loan being approved, they will also ask you to come into their offices to sign the necessary documents. The fees are on a sliding scale, and your mortgage consultant will be able to inform you how much they will be exactly.

Unlike new bond origination, we are not paid commission by lenders when consolidating your debt in terms of remortgaging. We are unfortunately forced to charge a fee for the service provided when placing business with the lenders. We try to keep the fees to a minimum but due to legal and administration costs as well as skilled staff, the fees need to be recovered. These fees are reviewed from time to time and are charged at the end of the registration process meaning that you will never be required to pay the fees up-front out of your own back-pocket. The fee is currently set at a minimum of R5000.00 plus Vat or 1% plus Vat of the total requested whichever is the greater. This service fee is taken at the end of the registration process and will be deducted from the amount owing to you by the registering attorneys. The registering attorneys will then pay the fee over to us.

Our service of trying to consolidate your debt resulting ultimately in a better combined interest rate than individual rates, is still a free service. Should you for some reason decide not to take up the mortgage offer then there will be no fee payable confirming our ethical stance that we only win if you win i.e. we only get paid if you get the benefit. A consultant will explain the fees as well as the saving to you in more detail once all documentation is received and agreement is reached by the lenders.

Please note that Bond Busters arrange all of its clients a 40% discount with their homeloan registration fees. It does this by using collective negotiation with our chosen bond registration attorneys (the fees above are the discounted amounts).

Bank initiation fees - Under the National Credit Act banks are allowed to charge up to R5,700 for their initiation fees. These vary from lender to lender but expect to pay at least R3,500 and no more than R5,700.

Bank cancellation fees - The actually cancellation cost for moving your mortgage from one lender to another is R680. In addition to this some lenders have a cancellation period of up to 3 months. However your bond registration attorneys will can put in cancellation notice to your lender and you can wait out that period and will only be charged the R680 fee.

Fees you don't have to pay:
No Conveyancing (attorney) costs - The conveyancing attorney is only involved in the selling of a property. As it is just your home loan that is being increased or transferred and not the property there are no transferring attorneys involved.

No Bank valuation fees - After the introduction of the National Credit Act the banks no longer charge a valuation fee but have included it in their increased their 'initiation fee', as described below.

No Transfer Fees - Transfer fees are only payable on new property purchases. Therefore there are no fees payable when you remortgage as there is no transfer of property, it is purely the increase or transfer of your home loan.

Note: As we do not receive commission from lenders for remortgaging, there is no incentive for our consultants to place you with one lender over another. You are therefore always assured that you are getting unbiased advice and the best deal for you.

Remortgage | Why Remortgage | The Remortgaging Process | Costs of Remortgaging