Compare home loans after ASIC measures, says expert

Friday 02 July 2010

Article by Mozo

Australian homeowners should start thinking about refinancing their mortgages now that the Australian Securities and Investments Commission (ASIC) has been granted powers to clamp down on home loan exit fees, it has been suggested.

Scott Pape, a finance columnist for the Herald Sun, noted that from yesterday (July 1st) "the corporate cops were given the power to take action against banks charging ‘unconscionable’ exit fees".

He observed that while the banks argue there is a cost involved in setting up a home loan and that consumers must pay it if they choose to leave early, the size of such charges remains contentious.

In advice for people looking to compare home loans, Mr Pape estimated that the big banks "will sting you about $700" for home loan exits, adding that some second-tier lenders could even charge thousands.

He suggested homeowners will be able to secure better refinancing deals now ASIC has "a chance to slap around the mortgage market".

Meanwhile, Colin Brinsden, an economics correspondent for Trading Room, claimed this week that interest rates may be placed on an "extended pause" following the economic effects of consistent recent hikes.

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