What is an Early Repayment Adjustment?
Last updated 17 March 2017
When you take out a fixed rate loan, you agree to make the scheduled repayments for the duration of the fixed rate term in return for the security of knowing your interest rates and therefore repayments will not change. If you choose to end your fixed rate period early, either by prepaying your loan in part or in full or by switching to a variable rate, you are effectively breaking your agreement. If we make a loss as a result, you need to pay us an adjustment amount to put us in the position we would have been had you honoured your original fixed rate term.
See the Early Repayment Adjustment fact sheet for more information including a worked example.