July 23, 2011
Switching home loans has become one step easier with the removal of mortgage exit fees.
The federal government’s ban on exit fees was passed into law on 23 March and will apply to loans taken up after 1 July 2011. The change won’t include existing home loans, fixed rate mortgages or discharge fees.
While the removal of exit fees may not provide sufficient reason alone to switch mortgages, it may prompt consumers to shop around for what else is available in the marketplace. When it comes to refinancing to consolidate debt, purchase an investment property, find a home, undertake renovations or minimise mortgage repayments, consumers now have the flexibility to find a product to suit their changing needs.
Keep in mind that exit fees actually make up a very small proportion of the 25-year cost of a home loan and it is still interest rates that really dictate how much your loan will cost over the long term.
For this reason it pays to do your research and not be too influenced by the abolition of exit fees. More than ever mortgage brokers will play an important role in analysing the options that best suit your individual set of circumstances.
It may be that your current loan provides the best choice or that by switching to another product you can achieve savings. Whichever the case we can inform you of the current state of the market and help steer you through the confusion of comparing multiple home loan products.