Review | 31 May 2016

Key Issues: 

Fixed rate break cost fee is unconscionable | Lender/credit provider | Reverse mortgage

Case summary

The consumers’ complaint relates to a reverse mortgage entered into with Loan company A. The FSP is the loan manager. The consumers’ have raised concerns about a fixed rate break cost (FRBC) that is payable by the consumers if they discharge their loan early. 

We find that the FSP is entitled to charge the FRBC as it was disclosed in the loan contract and we are not aware of any laws that it is in breach of or that would otherwise render the FRBC unconscionable.

Accordingly, we are unable to deal with the consumers’ complaint further. 

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This case was referred to the Ombudsman for a Determination.