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.
