Anyway to waive/reduce current Exit Fees

[pokka]

Hi All,

I'm just about to refinance my current two loans and both have exit fees. One in particular with Resimac has a ridiculous 3% exit fee which ends up being around $8500. This is in my contract.

Just curious though, is there any way to negotiate this amount? My mortgage broker is happy to give me $850 from his commission to assist with this but the banks do not want to help.

Anyone have any good ideas?

Is this fee also tax deductible as both my loans are for investment properties?

Thanks in advance,
Pokka

 

[tobe]

It is tax deductable, if the loan was for income producing purposes as far as Im aware. There isnt really any negotiating, as you are leaving them, its not in their interest to negotiate. Some of the larger lenders such as CBA were doing deals to get RHG re fis, but whether this is still going on you will have to do some research.
The main negotiation is done through their customer retention team, and they used to offer you a small discount on the rate or waive the ongoing fees if you decide to stay. Just enough so you dont go thru with the re fi.
A lot of smaller lenders dont have a customer retention team, and a lot of lenders are losing money, so they really dont want you to stay anyway, so they wont negotiate at all. Its a good education for your next loan....

 

[wylie]

We refinanced several years ago and were faced with break fees on our housing loan. I don't remember the details, but our broker arranged it so that we reduced the loan down to about $100 or $1000 (cannot remember) and we let it sit that low for a month or two (again, cannot remember).

Our break fees were calculated (from memory) on the balance over the final two months of the loan, or something like that. We still had to pay a break fee, but it was only a couple of hundred instead of several thousand.

I don't remember how we got the money to reduce the loan. We may have borrowed it from my parents for the short period, or we may have used another property to borrow before moving everything to the other bank. Get hold of a good broker and he/she should be able to work some magic.

 

[Bradsdad]

We refinanced several years ago and were faced with break fees on our housing loan. I don't remember the details, but our broker arranged it so that we reduced the loan down to about $100 or $1000 (cannot remember) and we let it sit that low for a month or two (again, cannot remember).

Our break fees were calculated (from memory) on the balance over the final two months of the loan, or something like that. We still had to pay a break fee, but it was only a couple of hundred instead of several thousand.

I don't remember how we got the money to reduce the loan. We may have borrowed it from my parents for the short period, or we may have used another property to borrow before moving everything to the other bank. Get hold of a good broker and he/she should be able to work some magic.

This would only work if both the DEF was calculated this way and if you didn't require the security they held or had surplus funds equity elsewhere to reduce loan.

 

[Qlds007]

As Steve mentions above read the small print of the DEF clause of your original Letter of Offer as the calculations are normally now based on the original debt and not the debt as at the day of repayment.

 

[Nth Brisbanite]

I've just refinanced loans out of Macquarie and was able to reduce my termination fees with the help of Rolf Latham (a frequent poster on this forum). He gave me the website of the the Banking Ombudsman which in turn listed a person I could contact direct at Macquarie. After pleading my case, Macquarie reduced my exit fees by about 50%.

 

[pokka]

Thank you so much everyone for your advice/input!!!

 

[Rolf Schaefer]

Many of our clients have been able to negotiate between 25% and 50% discount (depending on how long the loan was in place, usually no discount possible when loan has not been in place for at least 1 yr) on the DEF when re-financing from Macquarie.

 

[pokka]

I spoke a customer service consultant from Resimac on Friday and asked if there is a possibility to negotiate any sort of reduction on my exit fees - her response was you should have read the contract and even if you speak to my supervisor, he will give you the same answer as I did. A little harsh but I was only asking to see my options.

I will attempt to contact the Banking Ombudsman on Monday otherwise this will be a lesson learnt.

 

[Nth Brisbanite]

I spoke a customer service consultant from Resimac on Friday and asked if there is a possibility to negotiate any sort of reduction on my exit fees - her response was you should have read the contract and even if you speak to my supervisor, he will give you the same answer as I did. A little harsh but I was only asking to see my options.

I will attempt to contact the Banking Ombudsman on Monday otherwise this will be a lesson learnt.

I wouldn't give in too quickly. Why don't you contact (by sending a private message) Rolf Latham or one of the many mortgage brokers on this forum. Their advice saved me a lot of money.

I'm pretty sure that the termination fee is tax deductible but you need to check your accountant or the ATO about this one.

I'm sure there must be someone else apart from a customer service consultant who you can contact directly. I was told that it is better to put your complaint in writing. If you mention the Banking Ombudsman, they might be a bit more responsive.

 

[Rolf Latham]

Hi Pokka

A key question in getting somewhere in this regard is

why am I refinancing ?

ta
rolf

 

[karina]

can you perhaps substitute a security (if you have one) instead of paying out the ressimac loan?

e.g. say you have IP 1 with ANZ

IP 2 with ressimac

If you were to pay out loan on IP1 with ANZ and release the security then you could ask ressimac to do a security variation so you are not paying out the loan.

If this is an option for you , you would need to look at costs involved in paying out the other loan and organising the security variation, also its probably a good idea to speak to an accountant in regards to tax implications of doing it this way.

just an idea but may but may not suit your personal situation.

 

[ffc1883_1996]

I've just refinanced loans out of Macquarie and was able to reduce my termination fees with the help of Rolf Latham (a frequent poster on this forum). He gave me the website of the the Banking Ombudsman which in turn listed a person I could contact direct at Macquarie. After pleading my case, Macquarie reduced my exit fees by about 50%.

That's interesting. Were any of the loans fixed?

I have been trying to get out of some MM loans but the exit costs are prohibitive. They reduced the DEF but are insisting on a HUGE fixed loan break cost. Strangely, the fixed interest rate is well below their current variable rate so I thought it would be in their favour to break the loan.

Regards - Ben

 

[Nth Brisbanite]

That's interesting. Were any of the loans fixed?

I have been trying to get out of some MM loans but the exit costs are prohibitive. They reduced the DEF but are insisting on a HUGE fixed loan break cost. Strangely, the fixed interest rate is well below their current variable rate so I thought it would be in their favour to break the loan.

Regards - Ben

The loans were not fixed. Why not contact them direct or your broker, if you have one, to negotiate for you? As soon as I contacted the "complaints" person in Sydney, I got immediate action. Googe for the banking ombudsman's website which will give you the name of the person at Macquarie to ring.

 

[ffc1883_1996]

gave it a fair crack

I’ve tried quite a few things…

My broker generously offered to fund part of the refinance costs himself citing that he didn’t think it was fair to receive two commissions for the one IP purchase. I appreciate this gesture very much, however, with the exit fees that MM wish to impose, the costs are still really, really high.

MM offered a reduced DEF but insisted on fixed loan break costs of approx. $5k.
Then I approached Macquarie’s complaints department who just referred me straight to the MM staffer that I had already dealt with.
Then I approached the BFSO who advised that there’s nothing they can do.
APRA couldn’t help either, but they did suggest that I approach ASIC and the ACCC, which I did.
The ACCC sympathized verbally but led me to believe that they’d only be interested in helping if the bank’s unconscionable actions were against a “little old lady” – not an investor.
ASIC suggested that I talk to the BFSO.

Them’s the breaks.

 

[Gools]

That's interesting. Were any of the loans fixed?

I have been trying to get out of some MM loans but the exit costs are prohibitive. They reduced the DEF but are insisting on a HUGE fixed loan break cost. Strangely, the fixed interest rate is well below their current variable rate so I thought it would be in their favour to break the loan.

Regards - Ben

They want a chance for their rates to go down and make the current loss back from you.

 

[MiQu]

I've just refinanced loans out of Macquarie and was able to reduce my termination fees with the help of Rolf Latham (a frequent poster on this forum). He gave me the website of the the Banking Ombudsman which in turn listed a person I could contact direct at Macquarie. After pleading my case, Macquarie reduced my exit fees by about 50%.

I've just got out of Mac. Unfortunately didn't see this post earlier and paid the full exit fee, although will get most covered from LMI recovery (yet to received).

But would it be worthwhile trying to get back some of the exit fee thru the ombudsman? or is it too late for me since they have already deducted the exit fee's at settlement? If so who should I contact?

 

[Nth Brisbanite]

I've just got out of Mac. Unfortunately didn't see this post earlier and paid the full exit fee, although will get most covered from LMI recovery (yet to received).

But would it be worthwhile trying to get back some of the exit fee thru the ombudsman? or is it too late for me since they have already deducted the exit fee's at settlement? If so who should I contact?

You need to ring Macquaries direct. Follow it up with a letter to your broker or wholesaler. Make sure you ring the correct person at Macquarie which is given on the Banking Ombudsman's website (google to find this website). The LMI recovery fees are taking a long time to get back. It's annoying isn't it when they take your money in a flash but take forever to give you anything back.

Send a private message to Rolf. I'm sure he'll give you some sensible advice.

 

[lk1]

Okay, I'm confused. We just refinanced from Macquarie to St George (for a total of nearly $14,000 ) and have yet to receive any paperwork from Macquarie (settled early July). What I did find out from looking at the internet banking before it disappeared was that they charged over $1500 in LMI recovery fees - are you saying this is refundable? Our broker has been absolutely no help other than saying they would never have charged what they did for refinancing - but then again he also said St G would never have charged us as much as they did.

 

[MiQu]

We were refering to recovery of LMI paid at the start of the Mac loan (LVR>80%).

In your case, I suspect you didn't have to pay LMI. If this is correct, then "LMI recovery fee" in your case is part of the break-up fee, which is in the loan contract. Supposedly Mac paid LMI on your behalf (if you your LVR is <80%)... something I believe is 'unique' to Mac...

Anyway, one of my loans had this too (the one I didn't pay LMI for). However, I called them up before changing and managed to get them to agree to forgo this...might be worth a try...