According to a report on banks' mortgage entry and exit fees by the Australian Securities and Investments Commission (ASIC), larger banks are charging higher exit fees on home loans than smaller credit unions and building societies, which may serve to boost competition in the sector.
ASIC says the larger banks are charging an average $1,080 to exit a home loan, while credit unions are charging an average $400.
Treasurer Wayne Swan says he wants to make it easier for people to switch lenders.
"For many consumers it's not clear what entry and exit fees they will pay and at the moment, the average mortgage is refinanced every three years," he said.
"So having a very close focus on these entry and exit fees can save people a lot of money."
One bank has already released a mortgage product which is completely free of exit fees, highlighting the need for mortgage-holders to shop around and take notice of the exit fees applied to loan products on offer.
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