Exit Fee

The exit fee is charged when a borrower defaults, refinances, or transfers a loan to another lender. It is meant to cover the closing costs and compensate for the losses incurred by the lender on your early exit. Exit fees are different from closing costs, which are charged after you have fully repaid your loan. They are usually larger than closing costs because your lender loses more in terms of interest and ongoing fees. The Consumer Credit Code requires Australian lenders to disclose the exit fees in the loan agreement to avoid misleading borrowers.