Well after all the build-up, it seems to have finally happened. As of 23rd March 2011 – the Australian Government approved the abolition of exit fees.
The intent of abolishing these “Deferred Establishment Fees” (or DEF’s), is to give Aussie home owners the ability to refinance their mortgage with their existing lender without incurring any unnecessary “break” fees for doing so. Whilst this regulation won’t apply to all mortgage contracts (such as consumers under “fixed rate” agreements) it is likely to have a significant impact on the industry – with some current exit arrangements costing Australians the likes of up to $7000.
The regulation will apply to new loans commissioned after July 1, 2011. So you if you are looking to refinance or pay out your current loan– we still strongly recommend you know your exit terms by talking to your current lender.
