The rising cost of mortgages
The Australian Securities and Investments Commission (ASIC) review of mortgage entry and exit fees released late last week has revealed steadily rising mortgage fees along with the fact that Australian consumers are paying substantially more than many of their overseas counterparts.
The ASIC report, commissioned by the Federal Government earlier this year, will be used by the Commonwealth to implement a range of measures aimed at boosting competition within the mortgage industry.
However, the 35-page ASIC report makes clear a range of issues, including that the early termination fee taken as proportion of overall fees has increased from 19.31 per cent in 1995 to 41.83 per cent in 2007and that the total annual fee take against the aggregate Australian ‘mortgage book’ has increased from 0.67 per cent to 1.39 per cent a year over that time.
The ASIC report also uses data from Fujitsu Consulting and JPMorgan to reveal that Australian consumers are paying more in fees across virtually all stages of the transaction cycle.
The report also raises concerns about the complexity of home loan options and the manner in which they are described. ASIC points out that there is no standardised nomenclature and that this contrasts with the United Kingdom where, particularly in relation to fees on termination, there has been an effort to standardise terminology.
AUTHOR
Mike Taylor
Recommended for you
Technology firm Iress and investment manager Challenger have formed a strategic partnership to launch an adviser solution to better serve their retiring clients.
There have only been a “handful” of opportunities in the last 20 years when infrastructure has looked as cheap relative to equities as it does now, according to Lazard, making it a viable option to provide portfolio security amid market volatility.
While M&A has ramped up nationwide, three advice heads have explored Western Australia’s emergence as a region of interest among medium-sized firms vying for growth opportunities in an increasingly competitive market.
The Australian Financial Complaints Authority has reported an 18 per cent increase in investment and advice complaints received in the financial year 2025, rebounding from the previous year’s 26 per cent dip.
