Australian homeloans often allow extra repayments or early payoff, but there are a couple ofscenarios to be aware of:

• Break Costs on Fixed Loans: If you have a fixed-rate mortgage and you decide to pay it off in full or refinance before the fixed term ends, the lender may charge a break fee. This fee compensates the bank for the interest they lose due to the early termination of the fixed contract. Break costs can sometimes be significant if interest rates have fallen since you took the loan. However, if your loan is on a variable rate, there are generally no break fees for early repayment. Variable loans are flexible – you can refinance or pay them off anytime. We’ll advise you on this if you’re considering refinancing a fixed loan.
• Broker Clawback Fee: While AEXPHL doesn’t charge borrowers any upfront fees, there is a clause common across the industry that applies if a loan is terminated very early. When a bank pays us a commission for your loan, they will claw back (take back) that commission if the loan is closed within the first 2 years (24 months). This usually happens if a client refinances or sells the property in that timeframe. Because that creates a loss for the broker who did all the work, our agreement with clients can sometimes be to charge an up front fee. We aim to be transparent about this and we normally only charge if you anticipate needing a short term loan or plan on selling the property within this period. Most expat borrowers keep their loans longer than 2 years, so this is not normally an issue.

Aside from those points, there are usually no special “penalties” for expats. Australian loans do not have general early payoff penalties for variable loans. You are free to make additional repayments and clear your mortgage ahead of schedule if you wish – in fact, many lenders allow unlimited extra payments and will simply let you close the loan with no fee (aside from a small administrative discharge fee of maybe ~$300) when you pay it off.

If you do plan to refinance within a short period (chasing a better rate or if you unexpectedly need to sell), we will help you weigh the costs and benefits. Our goal is long-term satisfaction, so we don’t lock you in – we just make sure you’re aware of any possible fees in unusual scenarios. In summary, under normal circumstances you won’t pay us or the bank any penalty for early repayment on a variable loan, but be mindful of fixed loan break costs.