Discharge fee

The discharge fee is charged upon full payment or at the end of a loan period. Also known as the closing fee, it is meant to cover the costs of terminating the account and making the final arrangements. Discharge fees are usually larger when the loan is terminated prematurely, such as when transferring a mortgage to another lender. This is because the losses are greater on the lender's part, as they will stop earning interest and annual fees. Australian lenders are required to disclose the discharge fee at the start of a loan to avoid misleading borrowers.