ASIC’s review into mortgage entry and exit fees has revealed stark differences between those chaned by bank and non-bank lenders.
According to the report, average non-ADI fees significantly exceed banks and mutuals.
In particular, non-ADI early termination fees came in at almost $1,000 more than the fees charged by the big banks.
AIMS, RAMS and Ratebusters were highlighted as lenders with some of the highest fees.
While brokers agree that fees are an important issue, the resounding consensus is that they should not be considered in isolation.
“Productivity, accessibility, innovation and relevance to the market are all more important,” Jennifer Nielsen, chief executive of Loan Market, X Inc Finance and realestate.com.au Home Loans told Mortgage Business.
Ms Nielsen defended the non-bank sector, stressing that “they [non-banks] keep the market competitive and overall ensure cheaper mortgages for all Australians”.
She added that despite the best attempts by some sectors of the press to sledge the non-bank sector, the competition and reduced cost of borrowing they have bought to the market cannot be ignored.
Alison Whittle, managing director of brokerage The Mortgage Detective agreed with Ms Nielsen’s observation: “It’s important to look at the whole package”, and not just fees, she said.
The key to managing the issue of mortgage fees lies in the service provided by lenders and brokers, Ms Whittle said.
“Providing full disclosure of product features and fee structure to borrowers is most important,” she said. “If consumers aren’t made aware of the fees, or are sold loans that aren’t suitable, then that’s when the issues arise.”
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