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Home Loans in WA Have Exit Fees Removed

It was a welcome announcement from Treasurer Wayne Swan for new mortgage holders that borrowers who take out a home loan from July 2011 will not have to pay an early exit fee.

However, those West Australian’s who already carry a mortgage will benefit in no way at all.

The new legislation, being introduces in 2011, will see lenders who attempt to re-introduce exit fees under another title be prosecuted. Designed to break the market share of the four big banks, the exit fees at present stand between $700 – $900.

Shadow Treasurer Joe Hockey said the policy to abolish exit fees was more likely to hurt the smaller lenders as already, the bigger lenders have started to remove the charges.

“Smaller players won’t be able to do it so out with the exit fees and in with the application fees – other fees will go up because the smaller players need that fee income to remain competitive,” he explained.

Mr Swan declined reporters’ calls to explain why exit fees were not abolished for current loan holders.