Application fees are back

Two-thirds of lenders that removed exit fees from their home loans in the past week have yet to make any changes to fees or rates.

Among those that have made changes, the most common action has been to introduce or increase application fees.

Since July 1, lenders have been prohibited from charging deferred establishment fees.

According to the comparison website Mozo, 36 lenders have removed exit fees over the past week. Ten of them have introduced an application fee or increased an existing one.

They include Aussie, Better Option Home Loans, Gateway Credit Union, Greater Building Society, Intouch Home Loans, ME Bank, Police Credit Union and Yellow Brick Road.

The application fees range from $650 for B&E loans to $95 for Gateway and Yellow Brick Road. The average increase is $310.

Two lenders - loans.com.au and MyRate - have opted to increase their rates instead of charging application fees.

Mozo said 10 lenders were still displaying exit fees on their websites and had not issued any advice regarding their removal.

The exit fee ban applies to loans written after July 1, but one lender, Bankwest, has extended the withdrawal of exit fees to all its customers.


Note: article corrected 12 July to remove a reference to a new application fees by B&E, Credit Union SA and ME Bank.

B&E said it has charged an application fee for many years; it dropped the fee it dropped the fee in a special offer between February and June and reintroduced it after June 30. It said its decisions in relation to the application fee had nothing to do with the exit fee ban.

CUSA said its additional fee is a South Australia Government charge for registering a mortgage.

ME Bank said its upfront charges are more correctly described as a $150 solicitor's fee and a $150 valuation fee, which is not charged in all cases.