Beware Home Loan Exit Fees
According to review of
home loans in Australia, we pay more to exit a home loan than homeowners do in the UK or US.
Treasurer Wayne Swan prompted a report by the Australian Investment and Securities Commission (ASIC) which was conducted last year by Fujitsu Consulting & JPMorgan.
There are several fees and charges in the Australian market and consumers are not always aware of these when they sign for a mortgage.
Termination fees can range from a few hundred dollars to thousands of dollars. An early termination fee of $1,500 could be recovered, over three years, by an interest rate saving of at least 20 basis points (for example a drop from 5.40% to 5.20%). A $3,000 early termination fee would require an interest rate savingof more than 35 basis points over three years.
It is advised that you really think about your options before
home loan refinance. Always look at early termination fees before signing a mortgage, so you are fully aware of the potential cost, should you find yourself in a position where you need to pay out or refinance the loan.So, it is important to compare rates before you choose a mortgage and sign on the dotted line. Check to see what the exit fees would be and if this is likely to change.
When considering exiting a
home loan, you need to carefully consider what the savings would be by changing, and if these savings would be worth paying the exit fee.
If you are looking to refinance and want advice, call and talk to a local mortgage broker on 
.