When you take out a fixed rate home loan with a lender/credit provider, you sign a fixed rate agreement where you agree to fix your fixed rate of interest for a set period of time.

Thinking of getting out of a fixed rate home loan?

Getting out of a fixed rate home loan agreement during the fixed rate period can be surprisingly expensive. Therefore, if you decide to terminate, modify or pay off your loan early, for any of the following reasons, private home loan company you will be liable to your existing lender/credit provider for any loss they suffer as a result of breaching the fixed rate agreement:

>> You want to get out of your fixed rate home loan because you have decided to sell the secured property during the term of the loan

>> You have decided to switch your fixed rate home loan to another lender/credit provider to take advantage of lower interest rates

>> You have decided to change your fixed rate home loan to a cheaper variable rate home loan

>> You can pay off a home loan with a fixed interest rate early (partially or completely) because you received a lump sum or an inheritance, or

>> You want to make additional payments beyond the accepted tolerance because you may have received a salary increase

Will I be charged any fees if I cancel my fixed rate contract?

There are two types of fees you will be responsible for if you close or pay off your loan early, and this is the amount you will owe the lender/lender if you choose to pay off your fixed rate home loan before the end of the term. as:

>> Early Repayment Adjustment Fee (ERA) (This is an expensive fee) a

>> Early repayment fee (this fee is usually several hundred dollars)

If you’re still undecided about whether you should opt out of a fixed rate contract, it’s a good idea to:

>> You will first speak to your lender/loan provider and ask for a quote that will set out the fees that will be charged if you decide to pay off or ‘prepay’ your loan early