Upper house Senate backs home loans measures

Thursday 23 June 2011

Article by Mozo

Consumers looking to secure the best home loan rates have learned that they will not face mortgage exit fees in the future.

Mortgage exit fees have been outlawed.

The upper house Senate has backed the decision to ban money lenders from issuing the charges, despite opposition from some quarters, Reuters reports.

A bid by the conservatives to get the legislation overruled was thrown out on Wednesday (June 22nd 2011).

The opposition – which included independent senator Nick Xenophon – had wanted the conditions of the ban tweaked before it is enforced in July.

One of the major driving forces behind the ruling was to dilute the power of Australia's four major lenders, thus encouraging competition, but Mr Xenophon wanted the ban to be restricted to the quartet of big players rather than being made industry-wide.

A recent report published by the Grattan Institute indicated the majority of people seeking mortgages were looking to buy apartments or townhouses in city centres, rather than rural properties.

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