Break cost
A break cost is the amount a lender may charge when a fixed rate loan is repaid, refinanced or switched before the fixed term ends, reflecting the lender's loss on the funding it locked in.
Break cost, explained.
The cost can rise when market rates have fallen since the loan was fixed and may depend on the loan size and remaining term. When rates have risen there may be little or no break cost. Ask the lender for a current quote, as the amount can change.
Break costs may also apply to partial repayments above the permitted extra repayment cap, so check with the lender before making a large extra repayment.
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The Learn section is general information about lending in Australia. It does not take account of your objectives, financial situation or needs, is not credit assistance, and is not tax, legal or financial advice. Lender policies, government schedules and regulations change; check the current position with the relevant body or with us before relying on it.
