Westpac and its subsidiaries will increase the fixed rate prepayment threshold by $20,000 from next month.
Westpac, BankSA, Bank of Melbourne and St George have announced that the maximum excess payment that can be made during a fixed rate period without incurring a break cost will increase by $20,000 from next month.
As of 18 August 2019, the prepayment threshold will be $30,000 per fixed term.
This will apply to BankSA, Bank of Melbourne, St George and Westpac fixed rate home loans.
The banking group has said that existing customers with maturing fixed rate home loans will receive maturing letters, an update break costs booklet and a prepaid envelope to send back a refix form (should they wish to do so).
These will be sent out from 5 July for those whose loans are maturing in August, and from 2 August for those whose loans are maturing in September.
The banking group advised brokers: “If a customer reaches out to you as their broker to refix their loan, you are required to inform them of the new threshold if their new fixed rate period starts on or after 18 August 2019.”
Brokers are also advised to tell customers of both the current and new prepayment thresholds and inform them that their prepayment threshold will be dependent on when their T&Cs and loan offer documents are issued.
For any application that is not yet approved, the new threshold will apply once the loan is approved on or after 18 August 2019.
[Related: Westpac introduces changes to lending policy]