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Thousands take advantage of exit fee ban

04/01/2012

More than a quarter of a million mortgages were sold after last year's July 1 deadline for abolishing exit fees. Treasurer Wayne Swan said the reforms have effectively boosted competition, as evidenced by recent bank rate cuts.

Shadow Treasurer Joe Hockey countered that the numbers do not indicate how many borrowers took advantage of the ban to switch loans. He also criticised the ban for disadvantaging small lenders.

273,236 households are now free to switch their mortgages without penalty, said Swan. The reforms also included the introduction of a one-page mortgage fact sheet that will help customers compare different loan products directly with each other. The fact sheet became mandatory 1 Jan. A Mortgage Choice poll released in September suggested that homeowners would not refinance in light of interest rate cuts.

Source: Broker News



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