Clamp down on bank's fees

New Zealand Labour leader Phil Goff is calling on the Government to clamp down on banks charging exorbitant fees to people wanting to break their mortgages due to hardship...

Interest rates have been tumbling over the past few months and are expected to go even lower before the end of the year; last year the floating rate tipped 10 per cent but is currently hovering around seven.

People who refixed mortgages last year can only watch and wait for their terms to end, or pay hefty fees to refinance.

"The banks have locked people in. If you've got a three-year mortgage and you're still paying nine per cent interest rates and everybody else is paying considerably less, they'll put a hefty fee on for you to renegotiate that mortgage," Mr Goff said.

"I think in particular circumstances, where there is hardship, the banks have got to come to the party and the Government has got to make that clear to the banks."

He believed those most likely to be affected were people who had bought in the past few years at the peak of the housing boom and whose mortgages were higher than their properties were now worth.

"If one partner in a relationship loses his or her job and they can't meet the mortgage payment, perhaps they're locked into a three-year mortgage term, then that family stands to lose not only the income from the person that's out of work but also their home," Mr Goff said.

"I see no sign, at all, that the Government has thought about how they might address that problem. They're doing it in Australia. We need to look at that problem here. Potentially it's a serious one."

Source: www.nznewuk.co.uk