Exit fees for home loans banned

Wednesday 23 March 2011

Article by Mozo

Aussies might be encouraged to compare home loans in light of a recent ruling banning exit fees on mortgages.

Mortgage providers banned from charging exit fees

The ban will apply to all new home loans from July 1st and according to Treasurer Wayne Swan, this will increase competition in the market.

He noted that in the past, the cost of changing to a cheaper mortgage often negated the savings made.

"This is an important day for consumers because one of the biggest roadblocks stopping Australians getting a better deal for their families will finally be removed," he asserted.

With some exit fees as high as $7,000, the legislation might be welcomed by Aussies hoping to compare home loans online and switch from their current mortgage provider.

People who want to own their property might consider paying off their home loans fortnightly, rather than monthly, according to AMP financial planner Tony Rigby.

He told News.com.au that this can also reduce interest, which may make it a desirable option for many Aussies.

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