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Jessica Darnbrough
Lenders will replace exit fees with other upfront charges, one industry stakeholder has claimed.
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While some lenders have been looking at clawbacks as a way to recoup any losses incurred by the abolition of exit fees, Advantedge’s general manager lending distribution Brett Halliwell said brokers would also see lenders reintroduce and/or increase their upfront fees and charges.
“Once the government deadline has passed and lenders are forced to remove their DEFs altogether, I think we will start to see a greater shift towards upfront fees and applications charges,” Mr Halliwell told The Adviser.
But while consumers may be forced to pay more money upfront for their mortgage, Mr Halliwell said this is, fundamentally, not a bad thing for the third party distribution channel.
“I think it is fair to say we will see the current trend of upfront fees being waived shift. Not that this is a bad thing. When you look at the services that a consumer gets, particularly through a broker, brokers do a lot of hard work and they earn every cent in terms of looking after the consumer needs. If there is a bit more money in the kitty, that will help Australia’s lenders to pay their broker partners for the services they perform,” he said.
