Your break fee is calculated at the time of the break. A couple of things are thought about when working out the break fee.
- The amount of time left remaining on your fixed term
- The rates which other people are paying for that term- at the time you are breaking
Imagine you had a three year fixed rate at 4.5%. After two years you sold your house and paid off the loan. So you had one year left and at the time most people were paying 3.5% for a one year rate. Your break fee will be around 1% for 1 year. So basically the bank will look at what other people will pay to borrow the money you are paying back. Plus a little extra as they also have some profit factored into the rates.
Can we lower your break fee?
Well well well interesting question. Surprisingly yes, we can at times cover part or all of your break fee when switching banks. Meaning some of our clients drop down to a lower rate with $0 cost.
Ok what are the costs?
Switching banks can have some other costs, so we can provide you with a side by side comparison between a couple of banks. This helps you decide if the extra money is worth the hassle.
Ok where do I sign?
Easy tiger. Just book a suitable time with me to have a chat first. Fifteen minutes over the phone or online can do it(I can meet in person as well).
