ASIC investigates left-over mortgage exit fees

Early exit fees have been outlawed for all new loans signed since July 1. However, the ban does not apply to loans issued before the ban came into force.

Some lenders were offering loans with exit fees of more than $5000 only months ago, and the Australian Securities and Investments Commission is now reviewing whether these fees may breach recent unfair and unconscionable contract laws.

ASIC this month told the Senate's economic committee it was reviewing loans offered by 20 banks and non-authorised deposit-taking institution (non-ADI) lenders.

“This may bring to light potential unconscionable or unfair fee breaches,” ASIC said in response to a question taken on notice.

Source: The Age