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# Mortgage release fees on purchase of IP in Brisbane

Discussion in 'Accounting, Tax & Legal' started by pthm, 14th Jul, 2006.

1. ### pthmWell-Known Member

Joined:
25th Aug, 2005
Posts:
136
We bought an IP in Brisbane a few months ago, and the bank (CBA) debited our account for "TOF of \$1,126.20" on settlement. We did not understand what this fee related to, because the transfer duty on the mortgage was less than this. So, we queried the bank, and this was their answer:

Break up of fees as follows:
Release of Mortgage - 2 x \$108.30 = \$216.60
Transfer = \$801.30
Register of New Mortgage = \$108.30

I used one of the calculators available on the internet to calculate the fees and taxes on the value of the property of \$475,000 and a loan of \$380,000 (80% borrowing). These were the results:

Mortgage registration fee \$111.30
Transfer fee \$822.30
Stamp duty on property \$15,100 (we paid this)
Stamp duty on loan \$1,520 (we paid this)

So, there are some slight differences between the bank's figures and the calculated figures (\$801.30 vs \$822.30, and \$108.30 vs \$111.30).

However, what puzzles us is that why did we have to pay for the 2 releases of mortgages by the vendors. Is this normal? Would appreciate any clarification or views on this. We are going to ask the bank the same question if it was right that we should pay for the discharge of the vendors' mortgages.

Thanks in advance.

2. ### Rolf LathamWell-Known Member

Joined:
15th Aug, 2005
Posts:
45
Location:
Gold Coast and Sydney
Hiya

if there are 2 mortgages registered (not unusual) then both need to be discharged.

The incoming lender wears the cost but will always pass onto you.

Normally the vendor makes an allwance for this in the adjustments, so that they pick up the tab, even though on the surface you have paid it

ta
rolf

3. ### pthmWell-Known Member

Joined:
25th Aug, 2005
Posts:
136
Hiya Rolf

That was a great answer! You were absolutely right - I went back and checked the settlement details and yes, they did adjust for the release of the 2 registered mortgages by the vendors (the exact amount). So, in effect we did not pay for the release fee of the vendors' registered mortgages at all. Thank you so much - I was worrying for a moment that our bank was being silly.