Fixing Rate Question

From: Jay Hunter


If I fixed part of a mortgage now for 5 years whilst int. rates are lower and I found myself in a position in say 3 years where I had the money to payout the debt in total and lets say interest rates have gone up to 7.5% in 3 years... would there still be a cost to break the 5 year fixed term or is the cost only if rates are going the other way ?

in other words, are you penalised the same regardless of the direction of interest rates ??? any clarification would be great!


Last edited by a moderator:
Reply: 1
From: See Change


not sure what the current state of affairs is , but several years ago we actually got a refund from the commonwealth when we broke a fixed loan and interest rates had moved up in the meantime .

Happy investing see change

it's better to be guide by your dreams than your fears
Last edited by a moderator:
Reply: 1.1
From: Rolf Latham

Hi Jay

Many lenders will still stick you with a penalty which they call a defered establishment fee - in truth something that should actually be in most instances called an ANti Competitio fee.

Some lenders will look at economic cost or benefit, and will pay out the benefit

Ask the qeustion b4 you sign the contract and. Take the docs home with you, dont let them hurry you through it.


Last edited by a moderator: