Westpac shuns trend
(12 November 2010 – Australia) Westpac Banking Corporation has shunned pressure to scrap mortgage exit fees when announcing its interest rate increase at the end of last week.
Both ANZ and NAB revealed that they would be slashing exit fees in line with the government’s crackdown; however Westpac went against the trend when announcing its rate increase.
A Westpac spokesperson said that its A$700 exit fee would remain in place.
Gail Kelly, the bank’s chief executive, told the Australian Financial Review that banks removing exit fees would be forced to recoup these costs elsewhere.
Mrs Kelly added that keeping the mortgage exit fee ultimately provided customers with more choice, as they can avoid paying the fee altogether by staying with their bank.
Nathan Daniell, Simplify Your Mortgage’s managing director, told The Adviser that if the fees were scrapped banks would recoup the costs elsewhere.
"The big banks don’t really care if the government forces the exit fees to be reduced because they will increase application fees, reduce mortgage broker commissions and change the clawback of commissions to ensure they don’t make a loss," Mr Daniell told The Adviser.
A Westpac spokesperson said that its A$700 exit fee would remain in place.
Gail Kelly, the bank’s chief executive, told the Australian Financial Review that banks removing exit fees would be forced to recoup these costs elsewhere.
Mrs Kelly added that keeping the mortgage exit fee ultimately provided customers with more choice, as they can avoid paying the fee altogether by staying with their bank.
Nathan Daniell, Simplify Your Mortgage’s managing director, told The Adviser that if the fees were scrapped banks would recoup the costs elsewhere.
"The big banks don’t really care if the government forces the exit fees to be reduced because they will increase application fees, reduce mortgage broker commissions and change the clawback of commissions to ensure they don’t make a loss," Mr Daniell told The Adviser.
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