A Melbourne woman is taking on a mortgage lender over claims of â??unconscionableâ?? high interest rates and â??excessiveâ?? exit fees.
Emily Hamilton is taking RHG Mortgage Corporation (formerly RAMS Mortgage Corporation) to the Victorian Civil and Administrative Tribunal (VCAT) after the lender told her she would have to pay $12,000 to exit her home loan.
Ms Hamilton was keen to refinance to a more-competitive loan after RHG increased her variable interest rate well above Reserve Bank of Australia (RBA) rate rises, Consumer Action Law Centre (CALW) spokeswoman Nicole Rich said.
â??After she entered into the loan in July last year, RAMS, later RHG, started raising her interest rate to a point where now, even after recent RBA rate decreases, her rate is sitting at 0.99 per cent higher than when she signed, while the official RBA rate is two per cent lower,â?? Ms Rich said.
She said Ms Hamilton considered switching loans, but was faced with an â??excessiveâ?? early termination fee of more than $12,000.
Lodging papers against the lender with VCAT on Monday, Ms Rich said CALW would argue the early termination fee was unconscionable because it exceeded RHGâ??s reasonable costs arising from the early end to the loan.
It will also allege the interest rate rises on Ms Hamiltonâ??s loan were unconscionable and unreasonable, given they advertised the loan would keep competitive rates.
Ms Rich said borrowers signed up to variable home loans knowing the lender could raise or lower the interest rate, but lenders had no r …
Do you think they will go lower than 6% for 5 years?
Do you think they will go lower than 6% for 5 years?
