Several Australian banks have decided to abolish mortgage exit fees in the past few weeks, to the delight of the public. With no nasty fees charged to transfer from lender to another, the days of poor service and impromptu rate hikes seemed to be numbered.

But the 40 percent of home loan customers who are ready to jump ship should beware — there is an even more insidious game banks are playing. Clients who have decided to refinance to a lender of their choosing and have gone through the approval process with the new lender, are then put through the monotonous and painful process of having their current bank play games when the new lender attempts to refinance the debt.

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Some or all of the following are practices often employed by lenders: "Misplacing" the discharge authority signed by the client to advise their bank they wish to leave despite the request being sent numerous times; refusing to provide the new lender with the settlement booking number required for the settlement to proceed; having a dedicated retention team call their client to attempt to dissuade them from leaving, offering to match the rate offered by the new lender (could this rate not have been offered previously?!); and allowing a settlement booking to be made and then not showing up at settlement as agreed.

These practices can drag out the refinancing process for weeks or even months and often leave the client in an agitated state, sometimes of the mistaken belief that the new lender is at fault for the delay.

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Public awareness of these tricks should be raised and true banking reform should legislate for these settlement requests to be actioned in a timely manner.

Virginia Graham is a mortgage broker at Model home loans.

Your say: Have you refinanced your mortgage lately? How long did it take? Do you think we need new laws to prevent banks playing these tricks?

Video: NAB declares war on other banks by abolishing home loan exit fees