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: Refunded less $250 administration fee and any out-of-pocket expenses, subject to all material information and risk factors being fully disclosed upfront at the time of assessment. Where key information is omitted or materially changes during assessment, no refund will apply.
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
Note: Any changes to pricing, structure, loan terms, security, borrower profile, or material application details following submission, irrespective of pre-approval or post-approval status, may result in a reassessment of the transaction and attract a $300 Variation Fee, payable in addition to the original application fee.
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.