Mortgage exit fees are reasonable
A little more than half the people refinancing their mortgages pay exit fees and of those who do pay fees only about one-third pay more than $1000. This is the finding of a survey of 1028 people who refinanced in the past 12 months. The survey was commissioned by Mortgage Choice and conducted independently by Ticketek Insights. High exit fees have long been a sore point with bank critics and have been in the news recently because of a consultation paper issued by the Australian Securities and Investments Commission, setting out its plans for determining whether exit fees are fair and reasonable.
According to the survey, 54 per cent of people paid an exit fee when they refinanced their mortgages. Of those, 10 per cent paid $5000 or more, 20 per cent paid between $1000 and $5000, 30 per cent paid between $500 and $1000, 25 per cent paid between $250 and $500, 10 per cent paid between $100 and $250 and six per cent paid less than $100.
Mortgage Choice spokesperson Kristy Sheppard said a quarter of respondents reported that they delayed refinancing to avoid fees. Sheppard said: “It is interesting that respondents researched their options. They weighed up the cost versus the benefit, which is what any savvy borrower would do.” The MFAA argues that the fact refinancing makes up 30 to 35 per cent of mortgage sales each month is an indication that borrowers switch lenders with ease.
Source: Banking Day