Wayne Swan has been very keen to ban all exit fees on home loans and now he has his wish. It sounds like a good idea however it could pose a serious risk to competition in home loans. The smaller and non-bank lenders can't absorb high upfront costs the way the big boys can, so it's likely they will have to charge higher upfront fees to remain viable. Whereas before only borrowers who left their lender early incurred fees, now everyone will have to share the pain.
Watch this space.......
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