Selling a house or switching mortgages to another bank early could get unwary home-owners into significant financial peril.

In one case a man was asked to pay a total of $11,000 when he sold his house and paid off his mortgage earlier than expected.

As a result the Banking Ombudsman has issued a reminder to fully investigate the costs of terminating home loans early or changing banks.

Banking Ombudsman Nicola Sladden said it was important to consider the costs of moving your home loan or ending it early.

"It pays to research your obligations and all the potential costs before moving your home loan."

In the past year several customers unsuccessfully brought cases before the body charged with resolving disputes between banks and their clients.

The clients were disputing being lumped with early termination fees, administration fees and cash incentive repayments totaling between $3000 and $11,000.

The most costly case related to a man who was offered a $4000 cash incentive upon taking out a $550,000 home loan on a fixed rate for two years.

As a condition of the loan the man was told the incentive would need to be returned if he fully paid his loan off within the two year period.

When six months later he sold the property and repaid his loan the bank requested he repay the incentive together with an early repayment fee of $7000.

When he declined to do so the banks took him to court - but a settlement was eventually negotiated.

In another case a customer was offered $3000 incentive on his loan, which he took.

Five weeks later he wanted to change banks, however, when the move was finalised the man was upset to find he needed to pay back the incentive.

Sladden said if a cash incentive had been offered banks would ask for it to be paid back if you decided to move banks.

"A bank may lose money when a fixed rate loan is repaid early and is usually entitled to recover that loss.

"The responsibility for early repayment charges will be set out in the standard terms and conditions.

"It pays to research your obligations and all the potential costs before moving your home loan."