Early repayment

Early repayment break costs on your fixed rate loan

If you've come into some money and want to pay off your fixed rate loan, or you break the fixed term to get a lower interest rate, we charge a break cost. This cost is based on a complex formula, but in simple terms it calculates whether we've incurred a loss as a result of the prepayment or switch.

If you'd like to know what your break cost might be, just contact us and we can give you a quote.

Prepayment Costs on Fixed Rate Loans

 

Are there benefits to breaking my fixed rate home loan?

To get a lower interest rate

Generally speaking, any short-term gain from interest savings may be offset or even outweighed by the break cost. For this reason, you should carefully consider whether breaking your fixed rate home loan is a good idea.

However if a reduction in your regular home loan repayments would make a difference right now, then we can talk you through your options, including alternatives to breaking your fixed rate home loan.

Go to reduce your payments

 

When I'm selling

If you're selling your home and buying a new one you can often simply transfer the loan, without incurring any break costs.

If you're going to be repaying your loan once you’ve reached settlement on the sale of your home, you may decide to break your fixed rate home loan before settlement, and put the loan on a floating interest rate – paying the break costs you’ve been quoted. This will lower the risk of paying higher break costs if interest rates have fallen between the time you got the quote and reached settlement

Read more about selling and your home loan

 

Can I switch to a lower interest rate if I don’t have the money for the break cost?

It may be possible to add the break cost to your loan, but this could also mean that the total repayments you make over the life of your loan are higher – even with the lower interest rate you're switching to.

We can talk you through this to help you understand how adding the break cost to your loan will affect you in the long term.

Talk to one of our Mobile Mortgage Managers