Switching Made Easier
Borrowers who take out home loans now will be able to question any unconscionable exit fees but those already with a loan will miss out.
The clampdown on exit fees by ASIC should mean it is easier to switch borrowers and/or loans. Why switch? Reasons include a cheaper rate, consolidation of loans, undertaking a renovation or simply moving from fixed to variable or vice versa.
Switching can involve many charges including early repayment fees, lenders application and settlement fees, property valuation, existing mortgage discharge fees, new mortgage registration and even stamp duty in some states. Make sure you include these in your calculations when making comparisons and work out how long it will take to recoup these fees with a new loan.
A cheaper interest rate alone may not make for a cheaper loan over the long term. Know your current loan to make a clear comparison and question what bells and whistles you actually use.