How to ‘break-up’ with your fixed rate and avoid out-of-pocket expense

If you’re one of the tens of thousands of Aussies who fixed their rates a few years ago when rates were ‘never going to be lower’, then you’re probably one of the tens of thousands of people who are now frustrated to see rates in the mid 2s when you’re probably in the high 3s or even 4s. It’s time to break up with your fixed rate home loan. You’ve probably also used our smart loanScore calculator and can see that you could potentially make some pretty big savings. Well, depending on your situation, our team of expert brokers have found a way that you may be able to leave your current lender and move to a new lender with little to no out of pocket costs (and that’s even taking into account the break fees that your current lender will charge you!) In the last few years the competition between lenders, especially major lenders, to win new business has heated up. So much so that lenders have started offering cash rebates to new customers. So, why not leverage these rebates to pay your fixed break fees? It doesn’t work for everyone but lets run a scenario. John has a loan of $400,000 which is on a 3.89% interest rate and is fixed for another 18 months and the loan has 26 years left on it. His monthly repayment is currently $2,040. John rings up his bank and finds out that the break fees for his loan are $3,450. Currently one of the big four lenders is offering $3,000 in rebates if you switch to them. If John uses this to pay the break fees then his out of pocket is only $450 plus a few hundred dollars switching costs, let’s call it $300, for a total of $750 in switching costs. Assuming John switches to this new lender on say 2.29% then his new repayment is going to be $1,703 a saving of $337 a month. The switching costs are going to be paid off in under 3 months but the real win is how much interest John would save in the next 18 months and how much lower his balance will be in that time also. Assuming he keeps the monthly savings and doesnt use it to pay down the loan faster, then the total interest saved would be over $9,000 and his loan balance by month 18 would be about $4,000 lower. Assuming he uses his savings to pay down his loan faster then this goes up another $500 and results in over $6,000 of additional repayment off the loan which saves more money in the long term. Most lenders let you make at least $10,000 a year in additional repayments, even on fixed rate products but always best to check with your uno broker. Now, this calculation involves a few moving parts and relies on knowing your fixed break fees (and a few other things) so if you want to find out if this strategy might work for you, you can always book in a time with one of our uno brokers to crunch some numbers. Or, if enough is enough and you’re ready to ‘break up’ with your lender and see what better deals are out there, then we can help you find a better home loan.Book a call with a dedicated uno home loan consultant today!

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Rosie Deiath
July 2, 2024
Karis from UNO was so supportive throughout the entire process of buying our first home. She was contactable at any time, and answered all our silly questions for us. We couldn't recommend Karis and her team enough, as it always felt like she was in our corner with our best interests at heart.
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Jack Mikkelsen
July 2, 2024
We dealt with Karis Churchill as the mortgage broker for our first home. Karis was so supportive and knowledgeable through the whole process! A+ mortgage broker. Definitely utilise her expertise if you’re buying a house!
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Kapil Baldota
June 25, 2024
Eren Tan is absolutely one of the best mortgage brokers in Melbourne! Keeping us well informed throughout the process. Eren gave us a helpful hand in managing to get our loan over the line in a quick and efficient way which is what we wanted and he delivered on that. Thank you Eren Tan!
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June 21, 2024
I only have praise from my Uno experience! I was a broker sceptic, having done all of the hard work myself for my first two property purchases and sale. I'm now a proud broker advocate having used UNO (Karis Churchill) for two refinances and purchase. The value add Karis brought cannot be underrated! Not only has Karis got me the best rate, with a bonus cash back (nearly unheard of in this climate), she has done it with the least back-a-forth and with the least administrative burden on me (the thing that can deters people from refinancing to begin with). Karis is always on top of everything. Karis knows her stuff. She is the most responsive of any professional service provider I've ever used (my banker never text with an update at 7pm on a Sunday) without being overbearing. You know she's got your back and in my experience the value speaks for itself. Thank you to the whole UNO team, thank you especially to Karis.
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Leanda Cawdry
June 8, 2024
Very pleased with the outcome of this process, Michael Parsons and his team at UNO were helpful, communicative, and took all the stress out of the process of finding me a refinance deal that met my needs. Would definitely recommend Michael and UNO, and I already have!
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Glen Matthews
May 29, 2024
Regarding UNO Home Loan services. I had great experience with uno home loans, Michael parsons was my broker for UNO Home Loans we had excellent communication throughout the whole home loan application. If I had any questions on home loan application which were many were answered in great detail. He had the time to assist me in filling out endless application forms at anytime through the day or night which made the application process stress free. So I would strongly recommend Michael parsons from UNO Home Loans to try his services you will not be disappointed. Thanks to Michael parsons I have the lowest home loan interest rate I could ever hope for which I particularly ask for. It’s was a pleasure working with him. And will be using his services in the near future.
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Gillian Anderson
May 28, 2024
Thank you to Michael and UNO for their help in securing our home loan. I like the way they break everything down in simple terms to ensure that you can make the right decision. Michael was polite and very patient to help us get things across the line. We are now sitting in our first home away from rental circus. Can't recommend them enough. Thanks Michael and thanks UNO
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Andy Song
May 17, 2024
Amy has been absolutely wonderful as a broker. I would not hesitate one bit in recommending her services.
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Troy H
May 13, 2024
Scott Wilkinson did a great job as my broker. He was very patient and always happy to answer my numerous questions throughout the considerable period of time that it took to secure a suitable property. Would certainly recommend Scott and the team at UNO for anyone seeking a broker.
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Elvin Singh
May 10, 2024
First time I have used a Broker and I must say Andrew Wyers and his team were amazing to work with and handled my refinance from a Big4 bank. He was able to understand my needs and find a lender that will be able to help me grow my investment portfolio. Andrew and his team kept me updated as part of my refinance journey and made the process super easy and I was able to refi to new lender in under 2 weeks. Would highly recommend Andrew.
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Nadine Steffens
April 19, 2024
Scott and the team at Uno are absolutely 💯 amazing. I don't think I could have done my loan on my own. They are highly motivated and I do recommend them.
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April 16, 2024
Dealing with Scott Wilkinson was an absolute delight. Scott is tenacious, hard working and readily available. He made a very stressful process for me and my partner smooth sailing. Would highly recommend.
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