To Break or Not to Break

To Break or Not to Break

Have you been looking at the current low-interest rates and wondering how to apply that to your current lending?

How do you know if you should break your existing fixed interest rate, and refix at a lower interest rate?

What costs or penalties are involved, and will you actually save money by refixing at a lower rate?

Here at Nest Home Loans, we have had a lot of enquiries asking exactly that.

We can answer those questions with some loan details from you such as:

  • Loan amount
  • Current interest rate
  • Date your loan started
  • Length of the fixed term

You can get these details from your internet banking app.

The key piece of information we need is the break costs, with your permission we can get this for you. It is only valid for the day it is given but it is accurate enough for us to complete an assessment.

We look at the interest savings over the long term and any repayment savings in the short term

Break costs are a fee the bank charges to cover the cost of you breaking the interest rate term.

What are break costs?
This cost is always charged by the banks to break a fixed loan. Often this is an upfront payment, in some instances, it can be added to the mortgage.

A fixed loan is a contract between you and your bank. The lender agrees to keep your interest rate the same for a fixed period of time and in exchange, you agree to make fixed repayments for that same period of time.

If you break or repay the loan, you have broken the terms of the contract. Banks then charge a fee to recover the loss they incur from your change of contract.

So now what?
Simply book in for a phone chat using the link below or call 0800 337 426.

Book a Meeting

Vicky Springintveld
Business Development Manager

Phone: 0800 337 426
Email: [email protected]

To Break or Not to Break
 

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