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Exit fee review to spark refinancing activity

by Staff Reporter8 minute read
The Adviser

By: Staff Reporter

Refinancing may soon account for the majority of broker business moving forward, Firstfolio’s general manager Rob De Soza has said.

Mr De Soza is predicting a flood of refinancing activity over the next 24 months, should the Australian Securities and Investment Commission’s (ASIC) review of mortgage fees help deliver a healthier playing field for borrowers.

“Australians are paying high mortgage fees when compared with countries such as New Zealand and Canada, the proposed review will help spark activity among lenders to ensure not just their fees, but the terms and conditions of their lending contracts reflect a true and fair arrangement for the borrower,” Mr De Soza said.

“Exit fees are often the biggest barrier for homeowners wanting to switch lenders, due to the costs incurred by the lender to repatriate the funds. But as a result of the review, we imagine lenders are reviewing their fees, some of the big banks started some time ago, which will create a contagion effect that will see fees shrink, and competition on interest rates rise.”

Should these outcomes come in to play as a result of the review, Mr De Soza said thousands of Australian mortgage holders would be in a much healthier position to refinance their home or investment property loan.

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