Determination - 18 October 2016
Fixed rate break cost fee is unconscionable | Lender/credit provider | Reverse mortgage
- I find that the consumers may be liable for a fixed rate break cost should they elect to pay out their fixed rate reverse mortgage early. The consumers have asked the FSP for an indication of the cost to repay the loan early on two occasions, and on both occasions were given indicative fixed rate break costs. I find that those costs would have been payable had the loans been repaid at that time.
- This Determination affirms the position set out in our Review dated 31 May 2016 (the Review). I do not propose to restate that analysis but instead adopt it for the purposes of this Determination. A copy of the Review is attached.