Fixed break costs charged on security substitution??

I was talking to someone at St George the other day and they indicated if you did a security substitution on a fixed loan you would have to break the fixed loan and pay break fees. This doesn’t seem right to me, has anyone seen this before?

 

Only if the security provided wasn't sufficient to cover the loan amount or the LVR had increased etc.

 

Yes doesn't seem right to me as the loan is not being broken.

 

Thats what i thought and i pressed them on this but the person was adamant. Perhaps they didnt know what they where talking about (they where in the correct area though not just a general phone answerer)

 

WTF??? That's exactly why I assume you're doing a security substitution, so you don't have to break the fixed loans.
That's one of the common reasons on doing it, along with no longer being able to show affordability on the banks assessments and to keep deductible debt.

 

Now St G are saying if you fix a loan your interest only period reverts to a max of 10 years total (not the 15 I currently have). Just for fixing a loan. Seems if you are lucky enough to have a 15 yrs IO with St G dont fix your loan

 

Also the staff didn't volunteer the information i had to specifically ask about it. If i hadn't i may have fixed and not realized they chopped off 5 years of my IO.