- A break cost is a fee that could be charged if you end a fixed loan prior to the fixed interest rate period – either by refinancing elsewhere, switching your product, or paying the loan off early.
- When a fixed rate loan is taken, we’re giving you the benefit of certainty around your rate and what your repayments will be during the fixed rate period. The rate provided is based on numerous factors at the time the loan was taken out.
However, if you repay some or all of your fixed rate loan early, this impacts on our funding of this loan and the associated costs (if any) need to be determined. This can result in us charging you a break cost fee to help recover the costs incurred by the fixed rate loan finishing before it ends.
- Break costs may be high – sometimes in the thousands of dollars. Talk to us for a quote of the break costs and consider seeking independent financial advice.
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