What You Need to Know About Exit Fees

If you're planning on getting out of your current home loan to move to a better one, you might be in for a surprise. Exit fees are the bane of almost every borrower. The reason for this is that many people aren't even aware of the existence of these fees until the last minute. In this article, we're going to shed some light on some of important things about exit fees, so you'll be aware of them in the future. Let's get started.

If you have obtained your loan prior to July 2010, you still may have exit fee to pay if you choose to refinance. Prior to refinancing, you do need to check with your lender on the cost of this. However, any loans that were settled after July 2010 has no exit fee (other than admin cost) as the government has abolished it now.

Exit Fees Come in Different Names

Different lenders prefer to call their exit fees differently. However, they often share the same trait, that is, they are usually hidden and burdensome. Examples of how these fees are called include: deferred establishment fee and discharge fee. The rule of thumb here is that when you encounter a fee in your contract, make sure to have the lender explain to you what it is. You have the right to know the specific figures involved here, so that you could decide whether the loan is for you or not.

The Best Deal Might Not be Best After All

When you're looking for an ideal home loan, you will most likely consider the one with the lowest interest rate first. However, this might come with a catch, such as very expensive exit fees, which could tie you down in the long run. Thus, be sure to look into the details of the contract even before you sign it.

Your Broker Could Help You

Can't understand what the contract is saying? Unsure of what fees might be involved? Want to get a better deal on your home loan? Chances are that your broker could help you with these. He has the knowledge to explain to you what's in the contract so that you'll know exactly what you're signing up for. At the same time, he could use his relationship with lenders to negotiate a better deal for you. He might even be able to waive included fees altogether.

It pays to be informed when you are dealing with your home loan. If you're not careful, you might expose yourself to burdensome exit fees in what looked like a great deal in the beginning.

Speaking of great deals, the qualified advisors at Rate Detective could help you find one. They will assess your personal circumstances, and based on that, provide you with recommendations and a rate comparison of Australia's top lenders. After all, you deserve to get the best deal that fits your needs.

Get your quotes now

What to find out more? Enquire now

Published on November 11-th, 2012 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

More on this topic

Enquire about Home Loans
Please enter the estimated value of the property

Important Information

Not all providers in the market are included in the comparison.

Any information or advice contained on this website is general in nature and has been prepared without taking into account your objectives, financial situation or needs.

Related Topics