Can or can't make extra repayments on fixed interest?

[Easton]

My broker got my partial offset account interest rate wrong as it's 1% instead of 6.95% interest.

I'm going to be put on a 3 year fixed rate of 7.35% low doc home loan with a maximum repayment of $10k a year on top of monthly repayments.

Since partial offset account is going to be almost worthless, I may want to make additional repayments to the loan, more than $10k a year.

My broker advised that if interest rates is higher than my fixed rate (i.e it's now 7.7% since I last locked it in at 7.35%) they will accept additional repayments without penalty. Is this true?

This may not be relevant as I might just put extra cash in shares and then buy a second IP instead. But I feel it's important to at least know the facts should I ever want to make extra repayments on the mortgage.

In other words, I'm contemplating the idea of reapplying my loan to be a 1 year fixed rate instead of 3. Though i'll lose the 7.35% lock and be fixed at 7.7%.

It's unlikely i'll do this but i'd still like to know if it's true that I can make the extra repayments so as long as interest rates is higher than what i've got it locked at.

Sorry for the newbie question i'm just starting out!

 

[Medine]

Hi Easton,

The answer to your question is in your loan documents. You should have received a copy when you signed. You'll need to get them out and have a good read.

Cheers, Medine

 

[Spectre]

Which lender is it. While its a low doc in some cases their terms and conditions are the same whether its low doc or otherwise.
Also watch if you want to get it back out as some lenders dont allow redraw on the fixeds.

 

[Easton]

This is with St George low doc.

I called them and asked and they said they simply won't accept payments above $10k a year.

I'm going to have to be really careful and go directly to the bank when it comes to asking these important questions!