Underwriting Fees Australia 2025: Latest Costs & Changes Explained

Whether you’re applying for a major loan, considering an IPO, or renewing a commercial insurance policy, you may encounter underwriting fees. In Australia’s fast-evolving financial landscape, these fees are more than just a line item—they can impact your bottom line and the viability of your next big move. As regulatory changes and market competition shake up the scene in 2025, understanding underwriting fees is more important than ever.

What Are Underwriting Fees?

Underwriting fees are charges paid to financial institutions, such as banks or insurance companies, for evaluating and assuming risk in transactions. You’ll most commonly see these fees in:

• Home and business loans: Lenders assess the risk of lending to you.
• Initial Public Offerings (IPOs): Investment banks underwrite the offering, guaranteeing share sales.
• Insurance policies: Insurers evaluate your risk profile before issuing a policy.

These fees compensate underwriters for the expertise and risk they take on. In 2025, as regulatory scrutiny increases and digital automation reduces some manual work, fee structures are shifting across sectors.

How Are Underwriting Fees Structured in 2025?

The structure and amount of underwriting fees can vary significantly based on the type of financial product and the complexity of the transaction. Here’s a breakdown of current trends:

• Loans (Home, Business, Personal): Most Australian banks and lenders charge a flat fee or a percentage of the loan amount (often 0.5%–1.5%). Some lenders now offer reduced or waived fees for digital applications or loyalty customers as competition heats up.
• IPO Underwriting: Investment banks typically charge a percentage of the total capital raised. In 2025, the average IPO underwriting fee for ASX listings is around 2%–3%, but can be higher for smaller, riskier floats.
• Insurance Underwriting: For large commercial or specialised policies, underwriting fees may be explicit, while for most personal insurance, costs are bundled into premiums. Technology-driven risk assessment is reducing manual review fees in some segments.

Real-world example: In the recent IPO of a mid-sized fintech on the ASX, the underwriting fee was set at 2.7% of the funds raised, amounting to over $1.1 million. Meanwhile, some neobanks have introduced home loan products with zero underwriting fees for borrowers with high credit scores, reflecting new market pressures.

Regulatory Updates and Market Trends in 2025

Several regulatory and market developments are reshaping underwriting fees in Australia:

• ASIC Oversight: The Australian Securities and Investments Commission (ASIC) has tightened disclosure requirements for underwriting arrangements in both capital markets and consumer lending, pushing for clearer fee breakdowns.
• Open Banking & Digital Lending: The continued rollout of open banking APIs in 2025 is streamlining risk assessment for lenders, with some passing on cost savings as reduced or eliminated underwriting fees for digital-first customers.
• Insurtech Disruption: Insurtech firms are leveraging data analytics to automate underwriting, which is driving down fees in personal and SME insurance markets.

Borrowers and issuers should be aware that some lenders and underwriters are now offering fee rebates or discounts tied to environmental, social, and governance (ESG) criteria—a sign of how sustainability is influencing financial services pricing in 2025.

How to Minimise or Negotiate Underwriting Fees

While underwriting fees are often non-negotiable for retail customers, there are strategies you can use to limit your costs:

• Shop Around: Compare lenders or underwriters, especially digital-first providers, who may offer lower or no underwriting fees.
• Bundle Services: Some banks offer discounted fees if you take multiple products (e.g., a home loan plus transaction account).
• Leverage Loyalty: Existing customers with strong credit histories or high balances may qualify for fee waivers or rebates.
• Negotiate on Large Transactions: For IPOs, business loans, or insurance policies above $5 million, underwriting fees are often negotiable—especially in a competitive tender process.

Ask for a detailed fee breakdown and justification before agreeing to any underwriting charge. In 2025, transparency is no longer optional, so don’t hesitate to query costs.

The Bottom Line

Underwriting fees remain a key part of major financial transactions in Australia, but the landscape is shifting quickly. With new regulations, tech-driven competition, and greater fee transparency in 2025, borrowers and issuers have more power than ever to understand, compare, and minimise these costs. Take the time to shop around, ask questions, and make sure you’re getting value for your money—because every dollar counts.