The Australian Government is introducing a range of measures to the banking system which increase competition to help you get a better deal.
The first reform is a ban on mortgage exit fees on new home loans from 1 July 2011.
This measure will help boost competition in the home loan market over time, by giving consumers greater freedom to walk down the road and get a better deal.
Some lending institutions have already removed exit fees on home loans, while others are offering to pay your exit fees for you if you switch, so shop around.
First home buyers will benefit from the abolishment of exit fees from the 1st July, 2011.
Although there will now be no costs for switching mortgages, homeowners with an existing home loan will be subject to exit fees and will therefore face bigger restrictions for the life of their loan, which is usually 25 years.
Borrowers and first time home buyers need to be aware that exit fees are just one cost for breaking your loan contract and that there are a range of other fees and charges that could be incurred. Some of these other fees are discharge fees, documentation and legal fees, as well as establishment fees to set up your new home loan.
Under new law lending institutions that seek to re-badge their current mortgage exit fees as upfront entry fees or any other type of fee in the future can be fined under the reforms introduced from 1 July 2011.
Consumers need to shop around and compare the various products on offer and find the best deal.
Give us a call on 1300 793 143 or fill out the form on this page and let our mortgage broker find you the best deal to suit your requirements.