St George Advantage package early termination

Hi All

Wondering if anyone could help with this.

I have a 3 year fixed rate with St George about to expire (20 days from now) and just received the documentation for it to revert to an Advantage Package loan (5.04% variable - discount 0.75%).

In the acknowledgment form info (doesn't seem to be a proper full loan contract) it mentions there is a $1000 Early Repayment Fee if the loan is discharged prior to the third anniversary of the loan. I'm fine with that.

However, in one of the brochures attached it also makes reference to an Early Termination Fee of 0.9% of the loan balance (which would be a huge fee). It's very difficult to understand under what situations it applies but I called the call centre and asked and they said yes, if I discharge it prior to 3 years they will charge me 0.9% of the loan balance. I thought it was quite sneaky that there are two different early termination fees and one is shown prominently and the other is buried in their booklets. The size of this fee is totally unacceptable.

Has anyone else noticed this and were you able to negotiate it?

Adam
 
Well spotted Adam, you've gotta go over contracts carefully.

Oh, and never trust a word people say at the call centres. Whatever you are quoted over the phone, ask where it's stated in your contracts, or they can send you out something on paper confirming what you were told.

It's happened more than once, with a couple of banks, where i'm quoted one thing, and what i received on paper after that were two different things, which usually took at least a couple of calls to get things sorted out.

I once got fed the line of "Ok, we'll check our phone recordings and get back to you"
A couple of days later i call back, and get fed with "Sorry no-one got back to you yet ...oh, the telephone recording requested seems to have been accidentally deleted..."
 
Hi guys

Well I have a really bad taste in my mouth now.

I called again (the Gold Service number this time) and the gold service representative told me that yes it definitely applies. They were happy to let me go to another bank (whatever happened to loan retention).

Gold Service representative put me through to another Gold Service representative who knew a bit more about lending who told me that yes the 0.9% fee does apply. He also said that on my other loans it also applies! I was quite dumbfounded and said "I would NEVER have signed a contract with that clause". Sure enough he checked the original loan offer documents and it wasn't included in the contract!

He then said okay so it doesn't apply to your old loans nor does it apply to this new one with the Advantage Package (a whole new story).

I said I either wanted a full contract listing the fees that apply OR something in writing that states the 0.9% fee did not apply. He said he couldn't do that. As Rolf has said, supposedly the confusion comes from the difference between a discounted rate and a negotiated rate, and that it only applies to discounted rates but not negotiated rates.

So I now have to either accept this conflicting verbal information or move to another bank. It's too risky to have to cop an enormous fee should my circumstances change and I need to sell. When I choose a fixed rate loan I expect this to be an issue. If they are going to charge such hefty exit fees on variable loans, then at least get it straight.

For christs sake, STGs fee structure is so complicated even your own staff have no idea what applies to which product.

Thanks everyone for the insight.

Adam
 
Hi guys

Well I have a really bad taste in my mouth now.

I called again (the Gold Service number this time) and the gold service representative told me that yes it definitely applies. They were happy to let me go to another bank (whatever happened to loan retention).

Gold Service representative put me through to another Gold Service representative who knew a bit more about lending who told me that yes the 0.9% fee does apply. He also said that on my other loans it also applies! I was quite dumbfounded and said "I would NEVER have signed a contract with that clause". Sure enough he checked the original loan offer documents and it wasn't included in the contract!

He then said okay so it doesn't apply to your old loans nor does it apply to this new one with the Advantage Package (a whole new story).

I said I either wanted a full contract listing the fees that apply OR something in writing that states the 0.9% fee did not apply. He said he couldn't do that. As Rolf has said, supposedly the confusion comes from the difference between a discounted rate and a negotiated rate, and that it only applies to discounted rates but not negotiated rates.

So I now have to either accept this conflicting verbal information or move to another bank. It's too risky to have to cop an enormous fee should my circumstances change and I need to sell. When I choose a fixed rate loan I expect this to be an issue. If they are going to charge such hefty exit fees on variable loans, then at least get it straight.

For christs sake, STGs fee structure is so complicated even your own staff have no idea what applies to which product.
Thanks everyone for the insight.

Adam

You are right there.

At least you can make an informed decision though Adam, which is better than most.;)

Good Luck, let us know how you go.

Regards JO
 
Agree, the fee structure is confusing , but unfortunately it was due to new products coming on board which necessitated different pricing structures over the years.

In your case, I will make an assumption that the loan was new when locked in 3 years ago.

Your early repayment fee no longer exists as it has been longer than 3 years since the loan was taken out.

Your contract will list all fees that are to apply both before settlement and during the course of the loan ( if they are known ).

The $1,000 fee is "normal" for the first 3 years for most loans with the exception of intro rates, no deposits ( no longer offered ) or super fund loans.

I understand the call centre issue and apologise that you received the conflicting information.

If you want something from St George to confirm this, send me a PM with your email address and I will assist.
 
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Agree, the fee structure is confusing , but unfortunately it was due to new products coming on board which necessitated different pricing structures over the years.

In your case, I will make an assumption that the loan was new when locked in 3 years ago.

Your early repayment fee no longer exists as it has been longer than 3 years since the loan was taken out.

It was, but I'm now switching this loan to an Advantage package instead of it reverting to the standard variable rate. So I'm not worried in the least about the existing loan, its what happens when it converts to an Advantage package loan in 20 days time.

Your contract will list all fees that are to apply both before settlement and during the course of the loan ( if they are known ).

As mentioned, they will not provide a contract for this conversion to the advantage package. They simply provided a three page document with some basic terms and conditions that says refer elsewhere for more information on all fees and charges (i.e. the fee brochures they included in the envelope).

Dragon said:
The $1,000 fee is "normal" for the first 3 years for most loans with the exception of intro rates, no deposits ( no longer offered ) or super fund loans.

Fine with that, no issues at all. The 0.9%'er is the issue. It's pretty sneaky calling one an Early Repayment Fee and the other an Early Termination Fee.

Dragon said:
If you want something from St George to confirm this, send me a PM with your email address and I will assist.

I would definitely like that, but at this stage you might have misunderstood the issue. The issue is not with the existing fixed rate loan about to expire, its about the loan that replaces it on the date of expiry (the advantage package with a 0.75% discount).
 
Aw1,

The loan account number isn't changing as far as I'm aware. As such you will have done you 3 years penance and neither should apply. The existing loan should just have the relivant discounts applied at maturity.

If in fact STG need to change the loan number then there's cause for concern not only with the DEF but their lending practices as a whole.
 
I would definitely like that, but at this stage you might have misunderstood the issue. The issue is not with the existing fixed rate loan about to expire, its about the loan that replaces it on the date of expiry (the advantage package with a 0.75% discount).

Oh.... i see, sorry , I didn't address that point.

The loan remains, just switches to a different package. You have a negotiated rate of 0.75% which is good and above the normal discount.

However, this does not change the original contract which will show no early repayment after 3 years. The fact that you are packaging the loan does not constitute a payout of the loan.

So in summary, no early repayment penalty will apply.
 
Thank you.

As usual this forum is a wealth of information :)

I have gone ahead with it being quite reassured now that I won't be up for any surprises.

It would be nice for St George to address a few issues - the names of the two fees are very close which can be misleading and secondly, it is definitely unclear what constitutes a discount rate, intro rate and a negotiated rate for even the more educated consumers. The subtle difference could be very costly.

Thanks again.
 
AW1,

Are you dealing with the Darwin branch. A very similar situation below.

I'm really not sure if I will stick with them any longer.

They seem to do the easy stuff okay but have really messed up on a few important things for me lately. I had to deal with 4 different staff from the same branch and 2 of them didn't follow up on verbal requests that now cost me money in higher interest rates. The 2 senior guys contradicted each others advice and in the end neither did what I wanted which was rates locked/fixed at the 5.?% when rates were at this nice low figure. Went in to see them and was told please send us all your emails of correspondence so we can check and confirm. 80% of what was done was done verbally over the phones and as fate would have it the important stuff. Have been trying to get them to sort this out and now the fixed rate is a lot higher than when I came off and was negotiating. Basically I was told that St.G is not going to negotiate on any fixed rates.

As in your situation I asked for a pay out figure on 2 loans both started at the same time except one fixed IO and one variable PI but both now variable IO. Was told that one has the $1000 penalty but the other doesn't. Call centre operator didn't know why.
 
aw1 - I was under the impression that the $1,000 fee was the only 'termination' fee applicable however too late for me now. As an aside, you mention that the amount of the loan was substantial and therefore if you push, you should be able to get a better discount on the rate than that. We just (in the last 4 weeks) increased our loan under the Advantage package on a standard variable at 4.89% being a 0.9% discount.
 
Hi Y33,

AW1,

Are you dealing with the Darwin branch. A very similar situation below.

I've dealt with Darwin, Casuarina and Palmerston over the years. Certainly doesn't seem they can retain decent staff.

The best person I dealt with was Vinni when she was in lending but she has now become a branch manager at Palmerston. Was always very accommodating and pushed hard for fee waivers and discounts for us. Could contact her directly with no dramas.

I've now resigned myself to having to deal with the call centres as there is just noone I have any confidence in left. They gave me a hard time about trying to remove x-coll and ended up ignoring emails. I was about to buy an additional property but my dealings with them shelved it.. I would have had $1.6m in borrowings but they were still being hardasses and would not go beyond a 0.7% discount on the advantage package and claimed that there are no further discounts beyond 0.7% available and never have been. I ended up having to use the call centre just to get to 0.75% and an annual fee waiver on the advantage package!

I'm really not sure if I will stick with them any longer.

I've had the same conversation with myself numerous times but I think my laziness and the fact that I am selling my Darwin properties has kept me on the sideline.

They seem to do the easy stuff okay but have really messed up on a few important things for me lately. I had to deal with 4 different staff from the same branch and 2 of them didn't follow up on verbal requests that now cost me money in higher interest rates. The 2 senior guys contradicted each others advice and in the end neither did what I wanted which was rates locked/fixed at the 5.?% when rates were at this nice low figure. Went in to see them and was told please send us all your emails of correspondence so we can check and confirm. 80% of what was done was done verbally over the phones and as fate would have it the important stuff. Have been trying to get them to sort this out and now the fixed rate is a lot higher than when I came off and was negotiating. Basically I was told that St.G is not going to negotiate on any fixed rates.

This is a real pain. I had a drama with Westpac earlier this year trying to get a 5.19% rate. I applied before the fixed rate increased to 5.59% but was told I hadn't "really" applied because they hadn't transcribed the application into their computer system yet. Sent a complaint and never heard back from complaints or lending.

Y33 said:
As in your situation I asked for a pay out figure on 2 loans both started at the same time except one fixed IO and one variable PI but both now variable IO. Was told that one has the $1000 penalty but the other doesn't. Call centre operator didn't know why.

Perhaps that subtle difference between negotiated rates and intro/discount rates?
 
aw1 - I was under the impression that the $1,000 fee was the only 'termination' fee applicable however too late for me now. As an aside, you mention that the amount of the loan was substantial and therefore if you push, you should be able to get a better discount on the rate than that. We just (in the last 4 weeks) increased our loan under the Advantage package on a standard variable at 4.89% being a 0.9% discount.

I tried! Just got sick of fighting it (especially with the local lender) and in the end had to accept 0.75% and an annual fee waiver from the call centre. 0.9% was what I was looking for.
 
It's probably too late now however happy to give you the details of the name of the person we used in Sydney. We did everything over email.
 
Shuffler,

I would be interested in knowing more about that 4.89%. I'm on 5.09 and told lowest available. Would like to say to them what about this 4.89% rate and why don't I have it.

AW1,

Have had many a good contact with Vinnie. Maybe we should join forces and hit with a joint proposal or walk out. I'm still pushing for the 5.94 5yr fixed or 3 yr 5.14 that was offered that they are renegging on. Otherwise the possibility of a CBA or Westpac 6.19 2 or 3yr fixed.
 
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