johnokiwi

Hi all

Currently in NZ and have already posted this on the NZ forum, but with Westpac AU being parent bank of Westpac NZ and all that, thought it might be useful for you all here...

Anyone with fixed-rate mortgages with Westpac BEWARE - we have just been told that we will have to pay a $15,000 NZD penalty charge for re-paying it early as we are moving to Aus !!! :curse:

We are still reeling from the shock so details will be brief at present...

Needless to say no one warned us at the outset of the loan quite how severe penalty could be - in fact all the loan publicity just mentions that you 'may' or 'could' have to pay a penalty

Of course no one at Westpac willing to grab handles on this one and branch manager only agreed to see us after we refused to leave - but she was visibly shocked by what we told her and is taking it further as a 'higher level complaint'

We won't be taking this lying down but are in need of plenty of drinks tonight as a starting point!!!

Dave and Cat

comet555

Would your fees by wiped away if you were to take up another Westpac loan once you found a house in Australia?

It's worth a try. I know some banks would give a grace period where if you bought a new house in a certain time period it would just be treated more like a transfered mortgage.

Geelong Gent

You should check you individual mortgage agreements for exist fees. NZ was different last time I had one in NZ in that the exit fee was calculated on 6 months of interest versus a set amount.

So please not a panic attack for all the westpac mortgage holders. But wisely check you own agreements.

LAstly all banks will forgive exit fees if you refinance to another product. So worst case go for a 1 year variable rate and move on after 12 months.

comet555

When we left Macquarie we had exit fees of $2500, that was for a variable mortgage and we'd only been with them for a year.

We switched to Westpac and if we decide to leave in two years time we will be charged $900 for exit fees. This is also for a variable rate mortgage. So I imagine part of the reason your the OP's exit fees are so high is because it's a fixed rate. How long have you held the mortgage with them? The exit fees tend to go down the longer you're with them.

johnokiwi

This had crossed our minds altho' not sure how soon would be buying house (or whether we will ever buy a house again!!!)

But definitely worth a try (when we face them for the final showdown!!)

johnokiwi

Unfortunately just less than a year (but obviously we didn't foresee the change in our circumstances)

What really gets our goat is that at onset of loan [B]no one drew our attention to the potential severity of this - we just noticed the 'may' clause in the contract ourselves. I mean no one can foresee when and for what reason they might have to sell their house in future

Petals

When taking out the mortgage you really need them to tell you exactly what the exit fees will be. They stopped putting them on mortgages for a time but I guess now if you have these sorts of clauses and the banks wanting to claw back money they will enforce them.

Dig out all your paperwork from when you took the mortgage out, read the booklet and see what it says.

Hope you don't have to pay.

johnokiwi

Thanks

When we said to the first (clueless) person at the bank today 'No wonder you don't publicise this in your home loan leaflets etc - you'd have no business!' She just shifted uncomfortably!!

Luckily (we hope) all the docs we've looked at so far just mention that fee 'may' be payable - we hope this helps (plus lack of warnings at outset etc etc)..

medwaymark

Would of thought this is standard practice. Our mortgage was the same in the UK, but we moved after the fixed rate expired.

drrobert

Yes, I think charges for coming out of fixed rate mortgages are standard industry practice.

By taking a fixed rate, you're betting against the bank that the interest rate will rise. If interest rates rise, you will have 'won' in comparison with a floating-rate mortgage. If the interest rate falls, you would have been better off on a floating rate.

If there was no penalty for early withdrawal from the deal, those on fixed rate mortgages could just cancel their deals if interest rates fall.

Bibbs

Erm, it would have been in the contract you signed (after reading carefully).

philnorris

I dont think this is any reason not to use Westpac or be warned, its standard practice for all banks I know of to have some thing like this in the T&C's for fixed term fixed rate mortgages.

pumpkin blossom

Yes, this is standard practice, and to be expected bla bla bla, BUT NZ$15k??
That is a little OTT.

Good luck

emelems

dear o dear! that is very steep!

However, think title of thread should really read "mortgage contract beware"... most banks that i know of try and charge you if you pay up early...

With the current climate of banks over stretching to say the least, I would think that they should be paying YOU for actually honouring your debt!

(((hugs)))

Em x

louie

I'd have thought that would depend on how much they borrowed and how much below the variable rate their fixed rate is.

I have to say I too am surprised they are surprised; we are locked into a mortgage deal but the basis on which early repayment penalties are charged was clearly set out in the agreement we signed (after we had read it!!).