Charges for loan switching rise as banks net $5bn in fees
Australian consumers were charged $5 billion in bank fees last year as charges for switching home loans from fixed to variable rates went up, it has been revealed.
According to research released yesterday by the Reserve Bank of Australia (RBA), the banks earned a total of $12.7 billion in total fees last year – an increase of nine per cent that was mainly driven by growth in business lending and residential mortgage charges, the Australian reported.
Such news is sure to interest Aussies looking to compare home loans in search of the best deals. Bank fees earned on home loans grew by 17 per cent to $1.23 billion, the RBA found.
"The increase in housing fee income was driven by establishment and early exit fees, with the available information suggesting that break fees on fixed-rate loans accounted for a significant proportion of the overall growth in fees," the central bank commented.
Steven Munchenberg, the Australian Bankers Association’s chief executive, defended the higher fees, saying the bulk of the charges were directed at businesses.
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