Home loans customers urged to beware exit fees

Wednesday 12 August 2009

Article by Mozo

A recent article has urged Australians to make sure they get the deal that is best for them when comparing home loans.

Despite a raft of cuts to penalty fees from some lenders, the Sydney Morning Herald explained one major charge is to remain in place – the home loan exit fee.

The newspaper explained the charge can be around $10,000 to change lenders and noted some property owners are being forced to keep their agreement, even if more cost-effective ones are available.

Consumer Action Law Centre director of policy and campaigns Nicole Rich stated banks should not describe the levy as a "deferred management fee" and there should be more clarity in agreements.

The newspaper quoted her as saying: "Call it what it is, disclose it up front and disclose it very clearly up front – and as a dollar amount and not a percentage that varies depending on when you might terminate."

A number of lenders recently cut fees on overdrafts and late payments, including Westpac and St George Bank.

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