Are There Extra Fees for Investment Property Loans via Brokers in Victoria?

By Lowest Interest Rates Australia

Introduction

When I bought my first investment property in Victoria, I had about a million questions—what suburb should I buy in, how much rent would I earn, and (of course) how much would it all actually cost me? But one question that really puzzled me was this: “Do mortgage brokers charge extra fees for investment property loans?”

I remember thinking, “Surely they must! They’re helping me find the loan, compare lenders, and handle the paperwork. There’s no way this is free… right?”

As it turns out, most brokers don’t charge upfront fees to borrowers at all—and the ones that do are typically very transparent about it. But that doesn’t mean there aren’t costs involved in getting an investment property loan. Between lender fees, government charges, and ongoing costs, there’s plenty to budget for.

In this article, we’ll break down whether brokers charge extra for investment loans in Victoria, what fees to expect from lenders, and how working with a broker can actually help you save money overall.

Table of Contents

1. Do Mortgage Brokers Charge Fees in Victoria?
2. How Mortgage Brokers Get Paid
3. When Might a Broker Charge a Fee?
4. Common Fees for Investment Property Loans
5. Are Investment Property Loan Fees Higher Than Home Loans?
6. How a Broker Helps You Save Money Despite Fees
7. Case Study: Broker Savings for a Victorian Investor
8. Questions to Ask Your Broker About Fees
9. Tips for Reducing Loan Fees
10. Final Thoughts – Work with Lowest Interest Rates

Do Mortgage Brokers Charge Fees in Victoria?

Let’s start with the big question: do mortgage brokers in Victoria charge extra fees for investment property loans?

In most cases, no—you don’t pay a broker directly. Mortgage brokers in Australia typically earn their income through commissions paid by the lender when your loan settles. That means their service to you, the borrower, is usually free of charge.

However, there are a few exceptions. Some brokers may charge a small fee for specialised loans, complex applications, or situations that fall outside the norm—like commercial investment properties or self-managed super fund (SMSF) loans. But even then, they must disclose it clearly before you proceed.

So, while brokers provide expert advice, negotiate on your behalf, and do most of the heavy lifting, their service often won’t cost you a cent upfront.

How Mortgage Brokers Get Paid

Mortgage brokers are paid through commissions from lenders, and this is standard across the industry in Victoria and the rest of Australia. There are two main types of commissions:

1. Upfront Commission

When your loan settles, the lender pays your broker a one-time fee—usually a small percentage of the loan amount (typically between 0.5% and 0.7%). For example, on a $600,000 investment loan, the broker might receive between $3,000 and $4,200.

2. Trail Commission

This is an ongoing payment made by the lender to the broker for the life of the loan, usually around 0.15% per year of the remaining balance. It’s designed to reward brokers who continue providing support and customer service to you after settlement.

💡 Important note: These commissions come from the lender’s marketing budget, not from your loan amount. They don’t increase your interest rate or add to your repayment costs.

When Might a Broker Charge a Fee?

Although most brokers in Victoria don’t charge clients directly, there are a few situations where a fee might apply. These include:

• Complex applications: If your situation involves multiple properties, self-employed income, or SMSF lending, your broker may charge a small service fee due to the extra work involved.
• Non-conforming or low-doc loans: Some lenders outside the mainstream market don’t pay standard commissions, so the broker might charge you instead.
• Very small loans: For smaller loan amounts (say under $150,000), the broker’s commission may not cover their costs, leading to a minor client fee.
• Professional advisory services: Some brokers offer paid strategy sessions or pre-approval planning for investors, especially if you’re building a multi-property portfolio.

In all cases, your broker is legally required to provide a Credit Proposal Disclosure Document before you commit to anything, outlining exactly how they’re paid and whether any fees apply. Transparency is key.

Common Fees for Investment Property Loans

Even though brokers typically don’t charge you, the loan itself will come with some standard costs. Here are the main ones to expect when getting an investment property loan in Victoria:

1. Application or Establishment Fee

Charged by the lender for processing your loan application—usually between $300 and $700. Some lenders waive this fee during promotions.

2. Valuation Fee

Lenders often need to value the property before approving your loan. This can range from $200 to $600, though many brokers can help you find lenders that cover this cost.

3. Legal Fees

Lenders may charge a small fee (typically $200–$400) for preparing loan documentation.

4. Settlement Fee

A one-off charge to handle the settlement process—usually around $150–$300.

5. Ongoing Account Fees

If your loan includes an offset account or package, expect annual fees of around $300–$400. However, these accounts can help save thousands in interest, so they’re often worth it.

6. Discharge Fee

When you refinance or pay off your loan, most lenders charge a discharge fee (around $200–$400) to close the account.

As you can see, none of these fees are broker-specific—they’re lender fees. A good broker will outline all these costs upfront and often help you find lenders offering discounts or waivers.

Are Investment Property Loan Fees Higher Than Home Loans?

In general, yes—investment loans usually come with slightly higher fees and interest rates compared to owner-occupied home loans. Here’s why:

• Investment loans are considered higher risk since they depend on rental income and property market performance.
• Lenders often charge higher interest rates (around 0.25%–0.5% more).
• Some lenders apply stricter conditions, such as larger deposits or higher Lenders Mortgage Insurance (LMI) thresholds.

That said, a skilled mortgage broker can often offset these higher costs by comparing dozens of lenders, negotiating special offers, or structuring your loan in a way that maximises tax efficiency.

How a Broker Helps You Save Money Despite Fees

Even though there are various loan-related fees, working with a broker can actually save you a lot more money in the long run. Here’s how:

• Access to better rates: Brokers have access to a wide panel of lenders, including smaller institutions that offer lower investment loan rates.
• Fee waivers and discounts: Many lenders offer promotional fee waivers that your broker can help you secure.
• Loan structure optimisation: Brokers can set up offset accounts, redraw facilities, and interest-only terms that improve your cash flow.
• Prevent costly mistakes: The wrong loan choice can cost thousands in interest—brokers ensure you choose one that suits your investment goals.
• Refinancing opportunities: Over time, brokers monitor your loan and alert you when it’s worth refinancing to a better deal.

So while some minor fees exist, a broker’s role is to ensure your overall loan package saves you money—not costs you more.

Case Study: Broker Savings for a Victorian Investor

Let’s look at a real-world scenario. Emily, an investor from Melbourne’s inner suburbs, wanted to purchase a $750,000 investment property. She approached Lowest Interest Rates to compare lenders.

Her broker found two key options:

• Lender A: 6.2% interest rate, $700 application fee, no offset account.
• Lender B (through broker): 5.9% rate, $0 application fee, full offset account, $395 annual package fee.

By choosing Lender B, Emily saved over $2,000 upfront and about $2,250 per year in interest, all without paying her broker a cent. Her broker’s advice also helped her structure the loan as interest-only, optimising tax benefits and boosting her cash flow by $400 per month.

That’s the power of working with a broker who understands investment lending.

Questions to Ask Your Broker About Fees

Before you commit to a broker or lender, make sure to ask the right questions. Here’s a checklist to help:

• Do you charge any fees to clients for investment loans?
• What commissions will you receive from the lender?
• Are there any lender promotions or fee waivers available?
• Can you provide a breakdown of all costs before application?
• What will my ongoing costs be once the loan settles?

A trustworthy broker will be upfront about all fees and commissions. Transparency builds confidence—and helps you make smarter financial decisions.

Tips for Reducing Loan Fees

If you’re investing in property in Victoria, here are a few easy ways to minimise costs:

• Compare lenders: Don’t just stick with your current bank—your broker can find cheaper options.
• Negotiate: Brokers often negotiate fee waivers or reduced package fees on your behalf.
• Avoid unnecessary extras: Skip add-ons you won’t use, like credit cards or insurance bundles.
• Use offset accounts wisely: An offset account can save you thousands in interest if used strategically.
• Review your loan regularly: Check your loan every 12–18 months. Markets change—and so should your rate.

Final Thoughts – Work with Lowest Interest Rates

So, are there extra fees for investment property loans via brokers in Victoria? In most cases, no—brokers don’t charge borrowers directly. Instead, they’re paid by lenders once your loan settles. However, you’ll still encounter some standard loan-related fees like application, valuation, and settlement costs—but these exist whether you use a broker or go direct.

The real advantage of working with a mortgage broker lies in their ability to compare dozens of lenders, negotiate better deals, and structure your loan strategically. Their goal isn’t just to get you a loan—it’s to help you get the right loan.

At Lowest Interest Rates, we specialise in investment property loans across Victoria. Our expert brokers will explain every fee upfront, find the most competitive rates, and guide you through every step of the process—saving you time, stress, and money.

🏠 Ready to invest smarter? Visit LowestInterestRates.com.au today to connect with a trusted Melbourne mortgage broker and start building your property portfolio with confidence.