Swan takes credit for cheaper mortgages

The Government’s banking reforms announced in December last year, including a ban on exit fees, have already resulted in improved rates for consumers, according to Treasurer Wayne Swan (pictured).

NAB’s online subsidiary UBank recently announcing a standard variable mortgage rate more than a full percentage point below that being offered by the four majors, and Swan has released an announcement attributing the offer to the Government’s moves to “boost banking competition”.

“The big banks know that exit fees are a major barrier to competition in banking – which is why the Government has taken action to abolish exit fees on new loans from 1 July this year,” Swan stated.

Two of the big banks have abolished their mortgage exit fees for all customers “in response to our initial crackdown on unfair exit fees” while other big banks have also slashed fees or are offering customers cash to switch lenders, he said.

“The Government is introducing three broad streams of reform to empower consumers to get a better deal, to help smaller lenders put more competitive pressure on the big banks, and to secure our financial system so it can continue to provide a sustainable flow of credit to households and businesses,” Swan said.

“Vigorous competition is the best way to create a system that offers real choice for consumers, and we’re already seeing strong evidence of competition getting Australians a fairer go in banking,” he said.