Finance

[WebBoard]

From: Mike .


Break Costs
From: Shane
Date: 27 Feb 2001
Time: 12:21:11

I am in the process of trying to negotiate a waiver or reduction in break costs with Aussie Home Loans - want to end a 5 year fixed contract after only 1 year. Would love to hear from anyone who has had some success in this area.

Thanks - Shane

 

[WebBoard]

Michelle R

Reply: 1
From: Mike .


Re: Break Costs
From: Michelle R
Date: 28 Feb 2001
Time: 07:26:04

Recently hit with a penatly on a fixed loan (St George). Immediately contacted the banking ombudsman. Personally thought they were useless. I kept up the fight with my letters getting more direct, threatened to leave the big bad bank who puts profits before people, blah, blah, blah. Managed to get half the money back. I'm a big advocate of the kicking and screaming or mad cow approach. Could be they just wanted to shut me up. In saying this this tactic used on myself as a retailer also seems to work.

If you intend to leave the bank, I'd guess all the kicking and screaming will not have an ounce of influence. What's in it for them to consider you?

Have a good day, Michelle

 

[WebBoard]

Rolf

Reply: 1.1
From: Mike .


Re: Break Costs
From: Rolf
Date: 27 Feb 2001
Time: 13:52:02

Hi

Good luck. If you take your biz elsewhere I have not heard of anyone being successful with this. My personal view is that these types of costs altough contracted are no more than an "anti competition" tactic used by a lot of the non bank lenders.

If you wish to renegotiate your loan with Aussie, then you would have reasonable leverage.

Let us know how you get on

Ta - Rolf

 

[WebBoard]

KJ

Reply: 1.1.1
From: Mike .


Re: Break Costs
From: KJ
Date: 27 Feb 2001
Time: 16:37:13

I have a similar problem with Comm Bank. They want to charge me $1,600 extra for paying off a 170K loan 2 years early. They tell me it is impossible to get around the charges, because otherwise they would lose money.

 

[WebBoard]

Rolf

Reply: 1.1.1.1
From: Mike .


Re: Break Costs
From: Rolf
Date: 27 Feb 2001
Time: 21:28:19

Hi

Depending on your deal it may still be worth your while to move though, had a $ 12 000 break cost last week where it was worth it to move.

Most banks normally do not hit you with huge exits unless you are on fixed rates or within 12 to 2 years.

I always include potential break costs > 12 months in my loan comparisons - sort of changes the landscape a bit for some lenders.

Ta - Rolf

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