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The MFAA has welcomed the government’s intervention on early mortgage exit fees.
According to the MFAA’s chief executive officer Phil Naylor, the industry body strongly supports “all measures which promote competition in the mortgage industry and enable greater loan choice for consumers”.
“That said, the reality is the issue of mortgage exit fees is multi-dimensional. According to our members, there are industry concerns that any changes to mortgage exit fee structures will further inhibit the ability of non-banks lenders to compete in the mortgage market – thereby impacting the range of services non-bank lenders can provide consumers,” Mr Naylor said.
Mr Naylor said it was important to note that non-bank lenders have been able to offer consumer very competitive interest rates by deferring some of their set-up costs into deferred established fees which are paid only if there is an early termination of the loan.
“Non-bank lenders were the most heavily affected by the Global Financial Crisis and are still recovering from this significant challenge,” he said.
Mr Naylor said the MFAA would make detailed submissions in response to the ASIC Consultation Paper 135, on behalf of its non-bank members.
“This will ensure that while consumers are properly protected, there is no inhibition on competition by disadvantaging non-bank lenders.”