What is exit fee?
Exit fees (also called deferred establishment fees) were one-off charges lenders levied for paying out a variable home loan within the first 3-5 years — they were banned on new variable loans by ASIC in July 2011. Fixed-rate break costs are a separate category and still apply.
Exit fees (also called 'deferred establishment fees' or 'early termination fees') were charges Australian lenders applied when a borrower paid out a variable home loan within the first 3-5 years. They typically ran $700-$7,000 and were designed to recover the lender's loan-origination cost from short-tenure customers.
ASIC banned exit fees on variable home loans contracted after 1 July 2011. Loans contracted before that date may still attract exit fees if they remain within the contractual window — check your original loan contract.
Fixed-rate loans are a different category: 'break costs' on fixed loans are not exit fees and are still legal. Break costs compensate the lender for the interest stream they expected over the remaining fixed term and apply whenever a fixed loan is exited before its term ends.
deferred establishment fee · DEF · early termination fee
- Fixed-rate break cost — A break cost is the fee a lender charges when you exit a fixed-rate loan before the term ends — calculated as the differ…
- Discharge fee — A discharge fee is a one-off administrative charge ($300-$700) your existing lender levies when you pay out the loan — c…
- Refinance — To refinance is to replace your existing home loan with a new one — usually at a sharper rate or with better features — …
General information only — not personal financial advice. Verified against https://ratesniffers.com.au/glossary on 2026-06-01.