Application fees: definition
The application fees are the costs charged by the bank to review your file, set up the mortgage, and put the contract in place.
Types of application fees
They may be a flat fee or proportional to the amount borrowed. These fees should be factored into offer comparisons, because a slightly higher rate with low fees can sometimes be more attractive than a lower rate with high fees.
Application fees: example
For example, Bank A offers a rate of 1.60% with CHF 1,500 in application fees, and Bank B a rate of 1.65% with no fees. Depending on the amount and the term, the application fees charged by the first may cancel out the advantage of the lower rate.
