Homeowners in Australia who are trying to refinance their mortgage, risk incurring an increasing number of exit fees, said one commentator.
Anthony Keane, a finance writer for News Limited, said that fees were introduced by major lenders to discourage borrowers from switching loans.
He quoted research conducted by Smartline Personal Mortgage Advisers, which showed that exit charges from flat fees can range between A$750 and A$1,000, or a percentage of the loan balance.
An average A$300,000 mortgage could have a loan balance percentage of 2.5 percent, which could cost more than A$6000.
"These fees are separate to fixed loan break fees payable when borrowers try to switch to a variable rate home loan. Those break costs can run into tens of thousands of dollars, depending on fixed loan terms and interest rates," said Mr. Keane.
For people who plan to compare mortgages with a view of switching in the near future, Mr. Keane’s findings could provide information.
Mortgage Choice revealed last week that an increasing number of Australians are opting to share the costs of home ownership by purchasing properties with their family and friends.