Banks must slash home mortgage exit fees

Article Category: Loans & Lenders

By The Sunday Mail, 16 May 2010

BANKS will be forced to slash excessive home mortgage exit fees as part of a joint crackdown being planned by regulators and the Rudd Government.

As part of the moves the Australian Securities and Investments Commission will outline a new fee structure for banks to stop them charging what are deemed excessive mortgage exit fees that can be as high as $1000.

Banks that continue to charge excessive fees will be prosecuted under new consumer credit laws due to take effect from July 1.

It follows a class action announced last week against banks over other fees that has attracted thousands of bank customers eager to solicit damages from the case.

The Sunday Mail believes the new exit fee regime will allow banks to charge only what it costs them when a loan is paid out or face prosecution for having an unfair contract. 

As part of the moves the Australian Securities and Investments Commission will outline a new fee structure for banks to stop them charging what are deemed excessive mortgage exit fees that can be as high as $1000.

Banks that continue to charge excessive fees will be prosecuted under new consumer credit laws due to take effect from July 1.

It follows a class action announced last week against banks over other fees that has attracted thousands of bank customers eager to solicit damages from the case.

The Sunday Mail believes the new exit fee regime will allow banks to charge only what it costs them when a loan is paid out or face prosecution for having an unfair contract.