It sounds like good news but the banks will recoup this in other ways – which might be via higher rates and app fees.
Also, if you're LVR is above 80%. switching lenders may not be of much benefit – because you'll probably have to fork out for LMI again
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
sounds good in theory but as always the devil is in the detail. However in the short term a good move.
NO Difference
Exit for banks = $800
Exit for non-banks = $7300
We need portable transaction account !!Good for the major 4 who had the lowest Deferred Est Fees in Australia and can afford to waive them (two of the 4 already had).
Many non bank lenders only have a half good rate because they either get 4-5 years interest revenue; or if repaid within that time revenue from DEF.
Keep in mind that many non banks insure all loans. Over 80% they charge LMI to the clients and under 80% they pay the premium themselves (but get back via DEF if paid early).
There are two expected outcomes.
If you read between the lines I think the government is looking to support some building societies and credit unions; but at same time squash small non bank lenders out of the market.
Lenders like ratebusters with their low rate but $10,000 exit fees on a 500k variable loan will be a thing of the past.
Good to force small non-bank lenders out….
Love to be big 4 bank shareholderbonus points for the goose who has now put all borrowers out of the market until mid-2011 when borrowers will get a ‘better’ deal.
So how will fixed loans work
If we fix for say 3 years and decide we want out in 1 year, then is there no exit fees?
if this is the case we miles well all fix for 5 years knowing we have the ability to exit anytimeThey will probably increase broker clawbacks again now.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
keiko wrote:So how will fixed loans workIf we fix for say 3 years and decide we want out in 1 year, then is there no exit fees?
if this is the case we miles well all fix for 5 years knowing we have the ability to exit anytimeExit Fees and Fixed Rate Break Costs are not the same thing.
If you wish to exit/refinance a Fixed Rate Loan you will still be liable for any 'Break Costs' that may be payableSure some exit fees are excesive but as others have said costs maybe recovered by increases in other fees and/or rates
Disclaimer: I do work for a non-bank lender (who have now removed their exit fees on any loans funded since 1/7/2010)
More smoke less mirrors?
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