National Australia Bank (ASX: NAB) today showed support to the government’s decision to ban exit fees saying that the removal of mortgage exit fees is good for bank customers and competition and would also benefit those lenders who are offering their customers the fairest value and most competitive interest rates.

Unlike some of its competitors, NAB abolished its mortgage exit fees late last year.
For 21 months now NAB has also offered its customers the lowest standard variable mortgage rate of the major banks and some of the best deals on bank fees. The bank has also abolished overdrawn and monthly account service fees on personal transaction accounts.

NAB says its customers continue to save between $32 and $47 a month on an average $300,000 variable rate home loan compared to some of the other major banks.

Removing mortgage early exit fees will be good for competition and will give bank customers looking for a fairer deal on their home loan more power to walk down the road and get a better rate, it said.

As well as maintaining the most competitive home loan rate, over the past year NAB also was the first bank to abolish a range of bank fees; doubled the number of ATMs NAB customers can use without paying ATM direct charge fees; and had the biggest improvement in customer satisfaction of all the major banks (Roy Morgan Research).

The banning of exit fees on mortgages passed into law on Wednesday and will apply to all new home loans from July 1, 2011.