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  • Sara Hartigan

Breaking a fixed term home loan

Customer: David

Type of loan: Refinancing and breaking fixed term

Loan: $412,000

Deposit: Not required for refinance loan

Saving: $5,547 in first year

David had a mortgage on a fixed term and was tied in to a further 15 months at 3.8% on a fixed period.

After talking with The Umbrella Company on the phone we met with David through an online Zoom call and walked him through the options he could have available.

With interest rates at a record low, David had a niggling feeling he was paying more than he needed to… he was right. The mortgage experts David worked with did the maths and found that there were a number of options to break his current fixed rate mortgage, pay the penalty fees and still come out more than $5,500 better off in the first year and over $10,000 in savings on his mortgage over the first 2 years.

David was with KiwiBank and paying 3.8%, fixed for 18 months, through moving bank and product David was able to reduce his interest rate to 2.65% for two years.

By moving lender after talking with The Umbrella Company, David was able to secure a $2,800 cash back which covered the penalty fees charged by KiwiBank for breaking their fixed term contract. The lower interest rate at his new lender also meant savings on his monthly repayments.

By refinancing through The Umbrella Company, David’s interest rate was reduced significantly from 3.8% APR to 2.65% APR, fixed for two years, meaning a saving of $10,000 over the two year period.

The process of working with The Umbrella Company was simple, easy and free. If you are considering refinancing, would like to calculate the potential savings on breaking your fixed term home loan or you are unsure if you could make some savings then use our easy online form to leave a few details and request a call. Just answer a few quick questions to help us understand which products best suit your needs and we can help you through the entire home purchase or refinance process.

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