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Date Published : Tuesday, January 15, 2008
The government is pondering scrapping exit fees charged on mortgages in a bid to open up the home loans market to more companies.
Currently, banks and other lenders charge an exit fee on all mortgages which is payable when the homeowner decides to leave the deal for a better deal elsewhere.
However, according to the Australian, the Rudd government is mulling over plans to scrap the fees completely with treasurer Wayne Swan asking the Treasury to compile a report over what measures can be taken to increase competition in the sector.
Mr Swan's spokesman told the news provider: "We believe it's a serious issue that Australian families confront and that's why we are committed to doing everything we can to remove barriers that stop families voting with their feet to switch banks if they are unhappy."
However, Mr Swan's opponents attacked the treasurer for not doing enough to prevent banks from raising the interest rates they charge on home loans.
Queensland-based bank Suncorp became the fifth major bank to raise its interest rates since the start of January, as it announced an increase of 0.12 per cent on the rates it charges. So far this month, ANZ, National Australia Bank, Commonwealth Bank and St George have all raised interest rates.
Opposition treasury spokesman Malcolm Turnbull told the Australian that Mr Swan should put the banks under more pressure to resist rate changes.
He said: "Wayne Swan is being treated like a mug. They've taken advantage of his inexperience and he hasn't put the pressure on the banks that they need.
"If the banks were obliged to justify this rate rise, they'll be much more cautious about making it in the first place."
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