Fixed Home Loan Rate Changed after Signing The Contract without Notifying Me

Lpatrickedwu on 16/11/2017 - 10:02

Hi everyone,

I refinanced from Westpac to Bankwest in July for 3 years fixed rate, the rate on the contract signed was 3.78%. The home loan was settled at the beginning of August. A few weeks after the settlement, I found out that the rate has been increased to 3.98%.

I spoke to Bankwest's customer service and complaint officer and they said that I signed up to a disclaimer that the rate could change anytime between signing the contract and the settlement date. I understand that they can change the rate but I need to be informed of the rate change before entering into the final contract? No one at Bankwest has told me about this.

What should I do now?

Thanks,
Patrick

Financial

Comments

  • BensonP on 16/11/2017 - 10:10
    +6

    This is common, unfortunately.

    You only lock in the interest rate on settlement, basically.

    If the interest rate had dropped .2% (rather than rise) you would be angry if they locked you into the higher rate.

    • patrickedwu on 16/11/2017 - 11:22

      I understand that they can change the rate anytime before the final settlement. The thing is no one from Bankwest told me about the rate change.

      • BensonP on 16/11/2017 - 12:27
        -1

        At the end of the day, if you aren't happy, refinance.

        Banks can't lock you in forever. You can contact a mortgage broker to get the best rates, and they take care of all the paperwork. It's an extremely simple process.

        All the best

        • HighAndDry on 16/11/2017 - 17:21
          +1

          If OP is on a fixed-rate loan (as opposed to a variable rate one), it's likely for a fixed term, locked-in, and with heavy break-fees for early repayments (including refinancing). So probably not that easy.

        • BensonP on 16/11/2017 - 17:47

          @0blivion:

          I've never been on a Fixed Rate, so I stand corrected. Thanks for the info :)

  • djkelly69 on 16/11/2017 - 10:13
    +1

    Happened to me as well with a different bank (through a broker). Broker advised the rate is not locked in until settlement unless you pay a 'rate-lock' fee.

    (Incidentally the broker had never advised me of this 'rate-lock' fee and ended up refunding me the difference between the approximate cost under the original rate and the actual rate.)

  • HighAndDry on 16/11/2017 - 11:12
    +2

    I understand that they can change the rate but I need to be informed of the rate change before entering into the final contract? No one at Bankwest has told me about this.

    I'll bet that you WERE informed. Just not directly. If you read the documents you signed, one of the things you agreed to is, in addition to the rate able to change at any time up until settlement, that changes to the rate would be published somewhere - usually their website, or a newspaper, etc. THAT is how you're to be notified, and I'll bet my bottom dollar that you actually were.

    • patrickedwu on 16/11/2017 - 11:23

      So they can just publish it somewhere and I have to accept whatever rates that they have?

      • HighAndDry on 16/11/2017 - 11:26
        +1

        That's literally what you agree to in the documents you sign. They can't change the rates at will, they change it usually according to
        a reference rate (usually an RBA rate). I'm assuming noone put a gun to your head forcing you to sign those. If someone did, probably should go to the cops.

  • tsunamisurfer on 16/11/2017 - 14:33

    OP…here are your choices.

    1) Break the fix rate and incur penalties (likely thousand over dollars) , then go to another institution who will probably offer you their special rate of ….3.98%

    2) Live with it.

  • kev98 on 22/11/2017 - 21:27

    I believe ING count the rate of when you sent the loan change form in, which I guess could work either in your favor or in theirs if rates change in the interim.

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