Exit fees are charged by financial institutions to borrowers who wish to exit from their current home loans. Exit fees are also referred to as mortgage break fees and are usually charged if the borrower wishes to exit from their loan within the first five years, however this may differ between each lender. The amount that a lender charges for exit fees will also vary depending on the length that you have had the loan for, the amount owing and the term remaining on the loan.
In July 2011 home loan exit fees were abolished, except for any home loans that were signed prior to this date. To find out if your home loan has any exit fees contact your mortgage lender.
There are still a number of fees you can incur from breaking your loan or paying it off early.
If you end your current home loan you will still be charged a discharge fee and will have to pay new application fees with your new home loan lender.
Break fees also apply if you pay off your fixed-rate home loan prior to the fixed-rate period expiring. The break fee you could incur depends on the current interest rate and if the interest rates have come down since you started the loan. Contact your lender to find out exactly what the costs of breaking your fixed loan will be to see if it’s worth it.
Always ensure that you read the product disclosure statement when you sign up for a new home loan so that you are aware of all the fees and charges.
In a highly competitive Australian market it’s important to always be on the lookout for the best home loan rates and fees. Compare thousands of Australian home loans using RateCity’s home loan comparison tool and mortgage repayment calculator.