All the talk prior to the last Federal Election regarding the Mining Super Tax, has made me think, maybe there should be a super profit tax on the banks. The four major banks, last year made a combined net profit of B$21.8. We are talking billions here not millions, then they have the arrogance to increase interest rates above the Reserve Bank guidelines. Enough is enough, it is you & I giving this profit to the banks. If profits were dwindling I could sympathise with the banks, but profits are increasing. If the banks won’t pull themselves into line, maybe the Government should, by increasing the tax paid by banks unless they only increase rates in line with the Reserve Bank guidelines. The Federal Government making the banks drop their exit fee is a joke. CBA exit fee is $700. So if a client with a loan of $320,000 with 90% LVR (loan to value ratio)  was moving to Heritage Building Society, under the current system the fees would be, CBA exit fee $700, CBA settlement fee $300, Heritage application fee $600, Government charges $ 316 and Lenders Mortgage Insurance $5998. Total cost of moving $7964. So the scrapping of the exit fee will do nothing. In my opinion the Federal Government does not have a clue, 60% of my clients will have to pay LMI, therefore it is not feasible to move. What the Federal Government should do is make it compulsory for Lender Mortgage Insurers to transfer the LMI between banks. At this stage the client has paid CBA , and would have to pay a new amount to Heritage.

Who is making the money here?

The Mortgage Insurer, but I hear  no-one complaining about them. Previously they would refund up to 50% of the premium if the loan was paid out within 18 months, but not anymore.

As I said the Government dose not have a clue, and getting the banks to waiver a $700 fee will do nothing to make it feasible to move from one bank to another.