MORTGAGE exit fees will be banned in all new loans from next year as part of radical reforms in banking laws to be announced today.
As part of a package of reforms, the Treasurer and acting Prime Minister Wayne Swan will also give the Competition and Consumer empowers the Commission to launch an investigation into the price of the signaling between the four big banks.
price signaling that banks likely changes flag your interest rate upfront mortgage lending, which critics say invites rivals to follow suit and reduce competition.
The federal government will also create an official symbol of the smaller banks, credit unions and building societies will be able to show to show customers their deposits are guaranteed by the Government.
The ban on exit fees will take effect on July 1, 2011, but the government will have to get approval from Parliament's decision by amending the law of the National Credit Code.
Mr Swan said the reforms would be less popular with the big banks.
"Competition is the best way to keep interest rates lower over time, and help Australians to walk down the road and get a better deal if your existing lender is not caring for them is central to that," said . "We worked very hard on these reforms with our regulators to ensure they are effective, durable and not let big banks off the hook."
The decision is likely to be popular among the holders of mortgage loans, up 40 percent of whom would like to change lenders, according to a Newspoll survey last month.
However, some non-bank lenders argue that the movement is anti-competitive.
Intouch founder of Home Loans, Paul Ryan, said axing exit fees would force lenders to re-application fees of $ 1000 and $ 1500 or raise interest rates.
"If someone is taking away from your income, you have to find new ways to do that again, a form is an application fee or an increase in interest rates," he said.
The decision will be received by credit unions and building societies, which have low output rates.
non-bank lenders, credit unions and building societies the Government is expected to announce moves to ensure access to funding, similar to measures taken during the global financial crisis (GFC), to keep lenders afloat small.
During the GFC the federal government spent $ 16 million in bonds to buy smaller lenders to give them access to funds from credit markets after drying.
The measure would oblige the competition with the big four banks, National Australia Bank, Commonwealth Bank, Westpac and ANZ, who captured a domain in the mortgage market in Australia after GFC.
"Not everyone will welcome the plans we are announcing this weekend, at least for all major banks but are important steps towards a fairer, more competitive banking system," Mr Swan said.
As part of a package of reforms, the Treasurer and acting Prime Minister Wayne Swan will also give the Competition and Consumer empowers the Commission to launch an investigation into the price of the signaling between the four big banks.
price signaling that banks likely changes flag your interest rate upfront mortgage lending, which critics say invites rivals to follow suit and reduce competition.
The federal government will also create an official symbol of the smaller banks, credit unions and building societies will be able to show to show customers their deposits are guaranteed by the Government.
The ban on exit fees will take effect on July 1, 2011, but the government will have to get approval from Parliament's decision by amending the law of the National Credit Code.
Mr Swan said the reforms would be less popular with the big banks.
"Competition is the best way to keep interest rates lower over time, and help Australians to walk down the road and get a better deal if your existing lender is not caring for them is central to that," said . "We worked very hard on these reforms with our regulators to ensure they are effective, durable and not let big banks off the hook."
The decision is likely to be popular among the holders of mortgage loans, up 40 percent of whom would like to change lenders, according to a Newspoll survey last month.
However, some non-bank lenders argue that the movement is anti-competitive.
Intouch founder of Home Loans, Paul Ryan, said axing exit fees would force lenders to re-application fees of $ 1000 and $ 1500 or raise interest rates.
"If someone is taking away from your income, you have to find new ways to do that again, a form is an application fee or an increase in interest rates," he said.
The decision will be received by credit unions and building societies, which have low output rates.
non-bank lenders, credit unions and building societies the Government is expected to announce moves to ensure access to funding, similar to measures taken during the global financial crisis (GFC), to keep lenders afloat small.
During the GFC the federal government spent $ 16 million in bonds to buy smaller lenders to give them access to funds from credit markets after drying.
The measure would oblige the competition with the big four banks, National Australia Bank, Commonwealth Bank, Westpac and ANZ, who captured a domain in the mortgage market in Australia after GFC.
"Not everyone will welcome the plans we are announcing this weekend, at least for all major banks but are important steps towards a fairer, more competitive banking system," Mr Swan said.
