Browse Forums Home Finance 1 Jul 07, 2010 10:07 pm Hi all, Posting for a friend who is a little shy. (woos) They are about to sell their house for about $450k, and they have $305k left on the Westpac mortgage. Less agent fees looking about $125k clear. They will be house minding for 2 yrs prior to rebuilding. They are about to secure a block of land for $165k. Of the $305k, $264k is 18 months into a 5 yr fixed period, the balance in a variable rate. What will the penalties be on the fixed component given they are breaking the fixed period, and can this be waived if they finance the block through Westpac, and bank the balance of the house sale funds? Adrian B Re: Early exit fees on a Westpac Fixed loan 2Jul 08, 2010 12:12 am Only the bank can answer that. It depends on the interest rate etc. The contract will tell you most of the info (but not a figure obviously). They may be able to save a little buy transferring the loan to the land (but I doubt it) but it's still less than they borrowed so some fees will apply. If they fixed when rates were really low it won't be as bad. Re: Early exit fees on a Westpac Fixed loan 3Jul 08, 2010 4:34 pm Hi Adrian, The calculation for break fees is very complicated and many of the figures needed to do the calculation (such as the change in the wholesale rate) are only available to Westpac. You can read this article on how to calculate break fees which may help. The best thing for them to do is call Westpac and ask for an indicative payout figure. The only way to avoid the break fee would be to use loan portability to move the loan onto the new property rather then repaying it entirely and setting up a new loan. For loan portability to work the loan amount must be less than 80% of the new property value and the settlement days must be the same for the sale and the purchase (not easy!). Hope that helps, good luck! Re: Early exit fees on a Westpac Fixed loan 4Jul 09, 2010 11:29 pm Hi there, We were in the same situation at the start of the year. We had a fixed loan with Westpac and we had to pay just over 5 grand I think to break it. There was nothing that the bank could do, we took out our next loan with them and they waived all our other fees and saved us about 1500 dollars but they could not do anything about the break fee. The fee also changes each day depending on the interest rate and other things. We were on quite a high interest rate fixed so we are much better off now and will probably make that money back over time. Let me know how your friends go, I would be interested to see if they are the same and if you have any other questions, please feel free to ask Bek I'm back The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 13451 Is it just a report written to give to the bank initially and it is based on what and how your payments are made up for, or is it a full service where they go out and… 2 2984 0 1450 |