Establishment Fee: 2025 Guide for Australian Borrowers

For most Australians, taking out a home loan, car loan, or personal loan often means facing a series of upfront costs. One of the most common—and least understood—is the establishment fee. As lenders adjust their pricing and policies for 2025, understanding what an establishment fee covers, how much you should expect to pay, and ways to reduce or avoid it could save you hundreds, if not thousands, over the life of your loan.

What Is an Establishment Fee and Why Do Lenders Charge It?

An establishment fee, sometimes called an application or set-up fee, is a one-off charge paid at the beginning of a loan. It covers the lender’s administrative costs in processing your application, conducting credit checks, and preparing loan documentation. While the name varies between banks and lenders, the purpose is consistent: it’s the price of getting your loan up and running.

Common loans with establishment fees include:

• Home loans: Major banks and non-bank lenders almost always charge an establishment fee, typically ranging from $300 to $800 in 2025, depending on the loan type and lender.
• Car loans: Expect to see establishment fees from $150 to $600, with some lenders offering promotions that waive the fee for electric vehicles or new customers.
• Personal loans: The fee can range from $100 to $500, with lower fees often found on digital-only or fintech platforms.

In 2025, there’s a growing trend for lenders to be more transparent about these costs, as ASIC and the ACCC pressure the industry to crack down on hidden or confusing fees. Some online lenders now offer “no upfront fee” products, but these may come with higher interest rates or monthly account fees—so it pays to read the fine print.

How Much Should You Expect to Pay in 2025?

With inflationary pressures and competition heating up between traditional banks and neobanks, establishment fees in Australia have seen only modest increases for most products in 2025. Here’s what borrowers can typically expect:

• Home Loans: $350–$900, with the average sitting around $600. Some lenders offer fee-free loans for first home buyers or refinance customers.
• Car Loans: $175–$650, with digital lenders at the lower end and dealer finance often charging more.
• Personal Loans: $120–$450, but fintechs such as Wisr and Plenti often run limited-time $0 establishment fee offers.

Key factors influencing the fee amount include:

• Loan amount: Higher loan amounts can come with higher establishment fees.
• Lender type: Online lenders and credit unions may charge less than major banks.
• Borrower profile: Some lenders offer reduced or waived fees for certain groups (e.g., first-time buyers, green loans, or professional packages).

As of 2025, a handful of lenders have introduced “fee-free” products to attract customers frustrated with upfront costs. However, these offers may have trade-offs, such as slightly higher interest rates or additional monthly account-keeping fees. Always compare the comparison rate—which includes most fees and charges—across lenders, not just the headline interest rate.

Tips for Negotiating and Minimising Establishment Fees

While establishment fees are often fixed, there’s sometimes room for negotiation—especially if you’re a strong applicant or refinancing a large loan. Here are some practical steps to keep these costs in check in 2025:

• Shop around: Don’t accept the first offer. Use online comparison tools to find lenders with low or no establishment fees.
• Ask for a waiver: If you have a good credit score or are an existing customer, ask your lender to waive or discount the fee. Many banks will consider this, particularly for home loans over $500,000 or for customers refinancing from a competitor.
• Look for promotions: Keep an eye out for limited-time offers from digital banks and credit unions, which are common at the start of the financial year or during property market slowdowns.
• Bundle products: Some lenders will reduce or waive the establishment fee if you take out multiple products, such as a home loan and credit card.
• Factor in the total cost: Remember, a low establishment fee doesn’t always mean a cheaper loan. Always compare the total cost—including ongoing fees and interest—over the life of the loan.

With new consumer protections introduced in 2025, lenders are now required to present all upfront fees clearly in their Key Facts Sheets. This makes it easier for borrowers to compare apples with apples and avoid nasty surprises at settlement.

The Bottom Line: Make Establishment Fees Work for You

Establishment fees are a normal part of the lending landscape in Australia, but they’re far from set in stone. With increased transparency, regulatory scrutiny, and more competition from digital lenders, borrowers in 2025 have more power than ever to question, negotiate, and even avoid these upfront costs. Before signing any loan agreement, make sure you understand exactly what you’re being charged, why, and whether there’s a better deal out there.