Opposition Treasury spokesman Joe Hockey has called on the Government to help home owners who are trapped in a fixed rate mortgage and paying 4 per cent more than those with a variable rate.
Home owners who did fix rates, who now wish to change to a variable mortgage, face hefty exit fees, some as much as $20,000. Consumer Action Law Centre policy director Nicole Rich said many consumers did not appreciate the risks when they chose to fix rates.
Australian Bureau of Statistics figures indicate that fixed rate loans rose during 2007 and 2008, and peaked in March 2008 with 23.9 per cent of all new home loans.
Treasurer Wayne Swan has hit back, blaming the previous government for high rates.
Mr Swan said he understood some borrowers were now facing tough choices if they fixed their home loan rates early last year.
"The whole world changed in the middle of last year," he said. "The balance of risk in the international and national economy changed from inflation to a dramatic slowdown in growth, and the consequence of that is that some people have unfortunately been left with fixed rates.
"But if rates hadn't got out of control under the previous government, most people would not have been left in that position," he said on Channel Ten's Meet the Press.