ASIC to clamp down on home loan exit fees

The Australian Securities and Investments Commission (ASIC) has been granted powers to crack down on home loan exit fees, it has been revealed.

Under new consumer protection laws which take effect from July 1st, ASIC will also be able to force banks and mortgage lenders repay thousands of dollars in previous fees, the Herald Sun reported.

The move will make mortgage switching easier, encouraging more property owners to compare home loans in search of more competitive rates.

Commenting on the legislation, treasurer Wayne Swan said: "We’re delivering the toughest laws seen in this area because we are determined to clamp down on any exit fees that rip people off, or keep them from walking away from any bank that tries to take them for a ride."

The news comes after Jeremy Grantham, co-founder of global investment management firm GMO, told the Australian this week that the country is in the midst of a housing bubble that may soon be impossible to sustain.

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