01.Home loan exit fees ban becomes law
Are you with a bank that has abolished its mortgage exit fees, and if so have you switched providers? We want to hear your story! Email us at firstname.lastname@example.org.
On 23 March, the Federal Government’s proposed ban on mortgage exit fees was passed into law, and is now set to apply to all new home loans from 1 July 2011.
The exit fee ban is designed to boost competition in the home loan market, making it easier for consumers to switch without being hit by exit fees which can potentially outweigh any savings from a better home loan deal. Some of the larger banks have already moved to abolish exit fees ahead of the legislated ban coming into effect.
In a statement, Treasurer Wayne Swan said that the regulator ASIC had the power to pursue banks over unfair exit fees on new and existing mortgages, and was “able to stop banks re-badging an unfair exit fee as another type of charge.”
CHOICE has been campaigning strongly for the ban on mortgage exit fees as part of our Better Banking Campaign. As part of the ban, we believe it is crucial that the regulator bears down on any attempts by the industry to shift disproportionate fees to other charges throughout the lifetime of a loan.
CHOICE is also calling for the Government to make switching home loans easier through a comprehensive review of Lenders Mortgage Insurance and by reducing the amount of repeat paperwork required.
For more information, go to www.choice.com.au/betterbanking