No evidence to suggest bank influenced decision to fix rate for five years

Categories:

Bank decisions, Lending,

Summary:

Adeline and her husband William took out a home loan with the bank. They fixed the interest rate in 2021 and 2022 for one-year terms, and in 2023 refixed for five years at the lowest available rate. In 2025, their financial situation changed and in July, William contacted the bank to ask about the cost of breaking the fixed term. Adeline complained the bank misled and pressured her into refixing the loan for five years. She said she relied on advice from bank staff and wanted the bank to waive break costs, which were estimated at $45,000 to $50,000. She also raised concerns about a $3,000 loyalty payment offered by the bank and suggested the bank was trying to meet its own targets by pressuring her.

Published:

December 2025

Our investigation

We reviewed calls and correspondence between the couple and the bank from 2021 to 2023. There was no evidence bank staff pressured Adeline when they refixed in 2021 and 2022. In 2021, Adeline chose to fix for one year at the lowest available rate after being offered hardship assistance, which she declined. In 2022, both customers again chose a one-year term at the lowest rate.

In 2023, Adeline requested a home loan review session with a senior business manager. Adeline recalled the manager saying interest rates were likely to rise, and said she relied on this advice when choosing to fix for five years. The bank did not record the conference call with her, although the manager shared the standard bank disclosures with her, and the manager’s follow-up email summarised the scenarios discussed and interest rate options. The email did not contain any advice or suggestion to fix for a five-year term. Adeline asked about the five-year rate and later accepted this, along with a $3,000 loyalty payment. This payment required her to stay with the bank for at least three years. Adeline was given time, options and accurate written information before she made the decision. We found no evidence of pressure or misleading conduct by the bank.

We also considered whether the bank properly disclosed early repayment charges. The original loan agreement and subsequent variation letters explained how these charges were calculated and noted that such charges “could be large”. The bank met its obligations under the Credit Contracts and Consumer Finance Act 2003. Adeline said it would have been helpful if the bank had given some examples of how the charges were calculated, but banks do not have to provide examples, and they generally don’t do so because so many factors have a bearing on the charge.