Refinancing costs added to loan?

Hi i have never refinanced before but are considering it as I cant get my lender down any futher.

There are costs associated with the refinancing I thought i would pay those and they would be tax deductible. However the lender insists they are added to the loan.

Does this
1) stop me claiming them as tax deduction
2) Does it dirty my loan in anyway. I dont want to have to calculate that now only 99% of the loan is deductible (the amount that is to be refinaced)

Do all lenders do this? Happy to pay the fees but they wont let me

 

you should seek your own tax advice, but if a fee is deductible borrowing to pay it doesn't make it non-deductible.

 

I think it's a mix, some fees are deductible in the first year, some are supposed to be spread over three. Or maybe some are a capital expense. I am more worried about it being added to the loan and the total loan balance not being deductible and me having to do some complex calculation come tax time for the next 30 years

 

It is pretty standard for refinancing costs to be added to the loan amount but I can't imagine why a lender would insist that they have to be. I think it would be going against responsible lending laws to force someone to borrow more than they want to.

There will be some situations where the fees cannot be added to the new loan due to the LVR or servicing restrictions and the borrower would need to contribute additional funds.

 

I can't think of any fees where this would be the case. You might be thinking of borrowing costs which are spread over 5 years or the life of the loan if shorter. Since the loan is ending any residual costs would be deductible anyway. Mortgage discharges would be deductible in full. Any new borrowing costs would be deductible over 5 years though.