Not all mortgage advice is good advice

You might have seen social media posts and comments with ‘useful information’ about mortgages. One example is anecdotes from people who have paid off a lump sum from their mortgage, and they tell you the bank was absolutely fine with it. 

What you have to remember is that this ONE person’s experience. It only applies to their loan and their bank.

Yes, it is certainly possible to pay off lump sums with no penalty, but it depends on a whole lot of factors:

1. When did you fix the mortgage?
2. What is the current rate?
3. Where are the bank’s rates sitting now?
4. How long is the remaining term on your loan?
5. Which bank are you dealing with?

And there are other relevant factors, such as whether you’ve previously paid off a lump sum.

So don’t jump to conclusions based on ‘advice’ in a Facebook post. It may not be relevant to your circumstances. Worse, it may be spam or a scam. I recently saw a fake video of a celebrity appearing to give dodgy financial advice. We should expect more of these scams as AI takes off.

You’ll only know if you can repay a lump sum without penalties if you check with your bank. It’s true that in a rising interest rate market, there’s less likelihood of being hit with a fee if you change your loan – but you still need to check. Here are some links to the main banks, and what they say on the topic. 

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Remember that the only people allowed to provide financial advice in New Zealand are Registered Advisers. You can find the legit ones here. 

And if you have any questions about your loan, we’re always ready to talk.