Waiving of fixed interest break costs

Discussion in 'Loans & Mortgage Brokers' started by JK200SX, 1st Apr, 2020.

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  1. JK200SX

    JK200SX Well-Known Member

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    Would anybody know whether any of the banks would consider waiving the break cost fee for Fixed interest IO investment loans.
    As an example one of my loans with westpac is 3.99 IO fixed for 2 years. Would the banks consider waiving the break cost fee in the current climate to either go to a new variable rate or a lower Fixed interest rate?

    Has anyone heard of this being done, or being on the cards to adopt this change?
     
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  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    I don't think the would. But it wouldn't hurt to ask
     
  3. Peter_Tersteeg

    Peter_Tersteeg Well-Known Member Business Member

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    I have heard of some credit unions waiving fixed rate break costs, but never the mainstream lenders.
     
  4. Beano

    Beano Well-Known Member

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    Never heard of it
     
  5. milobear

    milobear Well-Known Member

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    I called up St George last week with a similar request. Although it was to break and re-fix with their current rate. Unfortunately, break fee was not going to be waived.
     
  6. JK200SX

    JK200SX Well-Known Member

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    I just called up CBA, and they said they couldn't do it "at the moment". So there could be some hope. If anyone hears of anything, please let us all know?
     
  7. Tyler Durden

    Tyler Durden Well-Known Member

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    I know of a CBA customer that had a fixed P&I investment loan. Break fee was waived and switched to IO. This was offered in lieu of a repayment deferral but the individual did have to substantiate finanical hardship.

    If you're struggling it seems there is some case by case flexibility.
     
  8. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    its like ur employer asking u to not be paid for work u have done, after you have done it

    So its not going to be common

    ta

    rolf
     
  9. meme plecko

    meme plecko Well-Known Member

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    Contacting CBA next week - if they don't want to waive the break fee, that's fine, will move to ANZ, get the refinance switch money that would easily cover the break fee and ANZ fixed rates are lower right now anyway. If CBA waive the break fee, will stay with them. Let's see what they say when they get pushed to the wall...
     
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  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    My guess is that they won't budge, but worth a try.
     
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  11. milobear

    milobear Well-Known Member

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    Depends what the break fee will be. My break fee was $8000 and I had 8 months left. Refinancing to another bank and getting $3-4k rebate was still not worth in my case.
     
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  12. Perthguy

    Perthguy Well-Known Member

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    I checked one of my loans. $23,000 break fee. I'd rather keep the loan.
     
  13. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    But also factor in any tax deductions and interest savings until the end of the fixed term
     
  14. JK200SX

    JK200SX Well-Known Member

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  15. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    no
     
  16. JK200SX

    JK200SX Well-Known Member

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    why not?
     
  17. Never giveup

    Never giveup Well-Known Member

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    Sorry for hijacking :-

    @Peter_Tersteeg how's credit union's loan serviceability calculator? i haven't heard much about them....
     
  18. shorty

    shorty Well-Known Member

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    Normally awful?
     
  19. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Because its like your boss asking u to not get paid for last months work.

    Lenders will make an analysis if its worth keeping a borrower based on

    • REAL flight risk
    • Apparent LVR
    • Income stability
    • History


    Having said that, had a lender that recently offered a 2 k retention bonus :)

    ta
    rolf
     
  20. meme plecko

    meme plecko Well-Known Member

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    Six weeks ago it was comfortably under 4k, with 10 months left and loan size of 280k.. One way to find out..