A parliamentary inquiry says the federal government should reconsider its decision to ban exit fees on new mortgages.
The Senate economic references committee said the banning could lead to higher upfront fees and reduce competition with the sector.
"The committee recommends that the government reconsider its decision to ban exit fees, before the amended regulations come into effect, with a view to allowing enough time for the effectiveness of the existing ban on unfair and unconscionable exit fees ... to be assessed," the report released on Friday said.
"If it proceeds with the ban, it should only apply to authorised deposit-taking institutions."
In December 2010, the government announced plans to ban exit fees on new home loans from July 1, 2011.
