Mortgage Key Facts Sheet consultation

Treasury has released a consultation draft of the Mortgage Key Facts Sheet proposed in the Government’s Competitive and Sustainable Banking System Package to be given by lenders to consumers for new home loans.

The document includes terms not currently used in the National Credit Act, such as product name, all-in rate, product features, total amount to be paid back, ongoing fees (per year) as well as a number of calculations, eg the effect on monthly repayments if the interest rate was to increase by one per cent and the amount a borrower will pay back for every $ borrowed.

The document is different from the simplified financial summary table researched in the Standing Committee of Officials of Consumer Affairs’ report ‘Simplification of Disclosure Regulation for the Consumer Credit Code: Empirical Research and Redesign‘ released earlier this year.

Under the Government’s timetable it expects exposure draft mortgage facts sheet legislation to be published in March 2011.

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