Terms & Conditions
Early Repayment Fee Notice for Corporate & Trust Borrowers
Effective 3 June 2025, all corporate borrowers, trustee structures, NDIS participants, and commercial security-backed loans must review the following early repayment policy and associated lending costs. A 2% early repayment fee applies to any discharge—partial or full—within the first three years from the loan’s origination. This fee safeguards lenders against the break costs of early-fixed funding and must be considered before refinancing or terminating a loan.
Key Highlights
- Effective Date: 3 June 2025
- Applicable To: Corporate borrowers, trustee entities, NDIS loans, and commercial security-backed facilities
- Fee Imposed: 2% early repayment charge if the loan is discharged (partially or fully) within three years
Understanding the Early Repayment Fee (2%)
Lenders incur real costs when borrowers repay early—particularly with fixed-rate funding sources like bonds or swap contracts. The 2% early repayment fee recovers these costs and discourages premature loan exits that could destabilise lender portfolios.
Where to find it: Section 5 of the loan agreement provides full disclosure of early discharge fees, including how they’re calculated.
Strategic Refinancing Considerations
Before refinancing or discharging:
- Request a formal early repayment fee estimate (2%) from the lender
- Weigh the net benefit Compare projected interest savings against early repayment charges.
- Consult advisors to model refinancing viability in light of upfront costs
Compliance with APRA & ASIC Standards
This early repayment framework aligns with:
- APRA CPS 220 – from the lender
- ASIC Regulatory Guide 209 – Credit Licensing
- National Consumer Credit Protection Act – Transparency & Fairness Borrowers must maintain records and compliance to satisfy internal audits and regulatory reviews.
Why Early Repayment Fees Matter
1. Lender Funding Stability
These fees protect against losses when fixed-rate funding is interrupted prematurely
2. Cash Flow Planning
Knowing the exact fee upfront helps borrowers manage working capital and avoid unexpected outflows
3. Informed Decision-Making
Factoring the 2% fee prevents overestimating savings during refinancing exercises.
Application Fee Refund Policy
Refunds are available under strict conditions:
| Scenario | Refund Outcome |
|---|---|
|
Loan not approved |
Refunded minus $250 admin + out-of-pocket expenses |
|
Security unacceptable or valuation below expectations |
Refunded minus valuation cost + $250 |
|
Loan approved but not settled |
No refund |
|
Refund offered before lodgement |
Full refund on a case-by-case basis |
Note: Once submitted, applications attract a $250 processing fee and deduction of disbursed costs, even if withdrawn.
Borrower-Borne Costs at Origination
Borrowers must cover:
- All valuation fees (initial & subsequent)
- LMI (if applicable)
- Discharge fees from outgoing lenders
- Legal, government & PEXA costs
- Fixed rate break costs are undeterminable
- Establishment, settlement & risk fees
- Penalty interest (if applicable)
Fee Structure Overview
- Rate Review Assessment: Free
- Split Loan Fee: $100 (applies only after acceptance)
- Interest-Only Extensions: $300 per split
- Partial Discharges: $300 + valuation cost
- Cross-Collateralisation: Not recommended unless required
Internal Refinancing Under "Permitted & Supported" Provisions
These provisions allow refinancing internally under regulatory compliance, with mutual advantages for brokers and borrowers:
For Brokers
- New Upfront Commissions: Incentivises ongoing client support and transparency
For Borrowers
- Reduced Legal Costs: Lower documentation burden
- Lower Settlement Fees: Efficient, consistent processes
- Reduced Risk of Disputes: Clear compliance reduces renegotiations
Summary
Corporate, trustee, NDIS, and commercial borrowers must factor in the 2% early repayment fee if discharging their loan within three years. These fees reflect actual lender costs and impact cash flow, refinancing decisions, and compliance obligations. Borrowers should review Section 5 of the loan agreement, seek binding fee estimates, and understand the refund policy and additional fees to structure lending arrangements that support long-term financial efficiency.