Sadly I am talking about variable rate loans. Here are some examples.

Examples – Source. Infochoice.com.au

Deferred Establishment Fees on variable rate loans

BANKS

ANZ Exit Fee –    4 years      $700 
CBA Exit Fee –    4 years      $700 
NAB Exit Fee –    4 years      $900
Wpac Exit Fee –  4 years      $900

SOME NON BANKS

Carrington National Exit Fee –      5 years                  0.6% or $1800 (the higher)
Homestar Exit Fee –                       5 years                   Yr 1 – 1.0% Yr 2 – 0.8% Yr 3 – 0.6% etc (on original loan)
MyRate Exit Fee –                            5 years                   Same as home start
Rate Busters Exit Fee –                 5 years                   Up to 2% of original loan

So the question is. Who will suffer from abolishment of exit fees?

In the case exiting a non bank, a 500k loan could mean 1. $3000  2. $5000  3. $5000  4. $10,000. Plus these lenders all have higher set up costs.

I’m sure the 4 banks can cope with 250M less fees p/a  between them. The non banks cannot afford this. 

Banks win. Competition loses. Non Banks Loss. 

We need real compeition. Otherwise customers have nowhere better to go!

The Ranger and her MonkeyBoy need to support competition. Not abolish competition then remove exit fees from the last lenders standing.

Clawback

Currently if you take a loan (with a major bank) with a broker and repay it in a short period of time. You pay the $700 – $900 fee and the broker repays his commission to the bank (claw back).

Many non-bank lenders have no claw back. The claw back is charged to the client (hidden in their higher deferred establishment fees).

No exit fees means Brokers will get non bank clawback (some will have to stat charging fees). It will also force some non banks to increase their rates.

There is a far better option and I think it might be in the wind…

Yes and no. Ive been reading a lot and reading broker forums. they are all complaining that the banks undercut them when you go direct. I want to know how I can get a discounted rate because I am not using a broker?