ASB's bottom line benefits from borrowers breaking fixed-term mortgage contracts

ASB's bottom line benefits from borrowers breaking fixed-term mortgage contracts

*This story was published in our email for paying subscribers. See here for more details and how to subscribe.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

4 Comments

Comment Filter

Highlight new comments in the last hr(s).

That's because they changed their break fee formula earlier in the year and the new calculation means that fees are substantially higher than under the ones they used to use (from the Credit Contracts and Consumer Finance Regulations).

And rightly so! I was one of the crafty buggers to take advantage of their earlier ERA calculation - refixed twice for lower rates without a fee on either occasion. It used to work that if your previous negotiated rate was below the current 'standard' rate, you could refix to a new negotiated rate without a fee (or at least that's how it appeared to work) - that meant you could just follow the rates lower if you got the timing right. Their new system has just brought them in line with other banks.

Yes. They now base the breakfee on the special rate available, not the standard rate. 99.99% of the time, the special is below the standard and thus borrowers incur more break fees.

Even worse, they base them on their wholesale rate, whatever that is...

(We can assume it is something like the swap rates, but who knows as they don't disclose them unless you are actually breaking your rate).