Look out for 'deferred establishment fees

Wed, 25 Feb 09

Look out for 'deferred establishment fees'

Home loan borrowers should watch out particularly for the big sting from "deferred establishment fees" which come into play these days if you leave a variable home loan early, typically within the first 3-5 years. They can be as large as the break costs on a fixed term loan and run into thousands. Most borrowers don't expect to change their loan in the first few years, but the fact is that the average life of a home loan is now very short - as low as 20 months.