More than a quarter of a million mortgages were sold after last year’s July 1 deadline for abolishing exit fees but the ban’s impact on competition remains uncertain.
Treasurer Wayne Swan released the statistics in support of his controversial banking reforms, calling them a win for the 273,236 households that are now free to switch their mortgages without penalty. The reforms also included the introduction of a one-page mortgage fact sheet that will help customers compare different loan products directly with each other. The fact sheet became mandatory 1 Jan.
According to Swan, the reforms have effectively boosted competition, as evidenced by recent bank rate cuts.
Shadow Treasurer Joe Hockey countered that the numbers do not indicate how many borrowers took advantage of the ban to switch loans. He also criticised the ban for disadvantaging small lenders.
A Mortgage Choice poll released in September suggested that homeowners would not refinance in light of interest rate cuts.
According to the poll, 36% of homeowners would consider switching, while 41% said they were content with their current rate. Another 14% said they "can’t be bothered" exploring refinancing options. Respondents were not limited to those households which took up loans after the ban.