Consumer group CHOICE has expressed concern that high fees are stifling competition in the home loan market, adding further fuel to the debate generated by Federal Treasurer Wayne Swan.
“Vigorous competition between lenders will only happen if consumers can switch institutions readily,” said CHOICE policy and campaigns director Gordon Renouf yesterday.
“Yet the range of fees lenders charge are designed to lock consumers into a mortgage product for one to five years,” he said.
According to CHOICE, recent figures indicate that Australians are paying more in home loan fees than borrowers in the UK, New Zealand and Canada.
“The Australian Mortgage Application Fee Index… shows Australia is at the top end [of the scale] with a rating of 17.1 points compared with 15.3 for NZ, 12.8 for Canada and 11.6 for the UK,” said Renouf.
“The [exit] fees should not punish consumers who are simply looking for a better deal in response to rising interest rates,” he said.
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