Login
ISCOVER
Jessica Darnbrough
Brokers could see a surge in refinancing activity as speculation mounts that the banks will soon remove mortgage exit fees.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
Up till now, borrowers have bore the brunt of higher funding costs – paying up to $900 to leave their mortgage early.
However, reports today suggest the banks will pre-empt government reforms of mortgage exit fees and drop the charges before the corporate regulator forces their hand.
Last week treasurer Wayne Swan told journalists he was on a mission to ban the fees that were stifling competition amongst lenders.
“What we will do is make the system more competitive, give more powers to the ACCC and put in place a range of reforms to keep them honest,” Mr Swan said.
Last week, CBA raised its standard variable rate 20 basis points above the RBA.
At time of publishing, the other three were still yet to move, suggesting they are taking a ‘wait and see’ approach in a bid to see what their competitors do.
This competitive spirit between the big four has been echoed in a recent poll, which found the majority of brokers believe competition has improved in the mortgage industry.
Of the 363 respondents, 55.4 per cent believe competition has improved between lenders in the last 12 months.
A resurgent NAB has turned the heat up in recent months, as the lender strives for market share. NAB standard variable rate remain the most competitively priced of the majors and the bank has also pushed for greater efficiency via the broker channel.
According to NAB Broker’s general manager John Flavell, the bank has already made significant improvements in its turnaround times.
“This last 12 months has been very much a case of us starting to perform to our full potential and that’s in terms of the service experience we deliver to brokers and their customers,” Mr Flavell told The Adviser.
“The focus has been on the front end of the process and we have made some really good inroads in this area. We aim to be boringly consistent so that a broker knows what they can expect from us.
“There are still areas we can improve on and we aim to do just that. We are currently putting all our energy and resources into improving funding and documentation.”
