What Drives Mortgage Fees in Australia?

20 Pages Posted: 3 Sep 2015

See all articles by Benjamin Liu

Benjamin Liu

Griffith University - Department of Accounting, Finance and Economics

Eduardo Roca

Griffith University

Date Written: September 2015

Abstract

We investigate the factors that affect total, ongoing and origination fees of mortgages in Australia during the period 1996 to 2011. We find that banks charge significantly higher total and ongoing fees than mortgage corporations although they require lower origination fees. We also find that fee levels are dependent on loan size, loan‐to‐value ratio and loan features like term of the loan and presence of an offset account. Further, we confirm that lenders trade‐off higher (lower) interest rates with lower (higher) fee levels. Finally, our results show that mortgage fees are significantly affected by market conditions.

Keywords: Credit criteria, Fee differentials, Mortgage fees, Mortgage lenders

Suggested Citation

Liu, Benjamin and Roca, Eduardo, What Drives Mortgage Fees in Australia? (September 2015). Accounting & Finance, Vol. 55, Issue 3, pp. 861-880, 2015, Available at SSRN: https://ssrn.com/abstract=2655181 or http://dx.doi.org/10.1111/acfi.12068

Benjamin Liu (Contact Author)

Griffith University - Department of Accounting, Finance and Economics ( email )

PMB 50
Gold Coast Queensland 9726
Australia

Eduardo Roca

Griffith University ( email )

170 Kessels Road, Nathan
Queensland
Brisbane, 4111
Australia
(07) 373 57583 (Phone)

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