A new regulation prohibiting mortgage exit fees may prompt Australians to start comparing mortgages.
The ban will apply to all new mortgages issued from 1 July onwards. The regulation is meant to raise competition in the market, according to Treasurer Wayne Swan.
Mr. Swan noted that previously, the cost of switching to a cheaper home loan tended to negate any accumulated savings.
“This is an important day for consumers because one of the biggest roadblocks stopping Australians getting a better deal for their families will finally be removed,” he added.
With some exit fees as high as A$7,000, the legislation might be warmly welcomed by Australians hoping to compare mortgages online and look for alternative mortgage providers.
People who desire to own their property might consider paying off their home loans fortnightly rather than monthly, according to Tony Rigby, AMP Financial Planner.
He added that this can also reduce interest, which may provide a desirable option for many Australians.