End of Financial Year

It is a loan where the interest rate is fixed (stays the same) for an agreed period.

Fixed and variable loans each have different benefits and risks and you should consider which type of loan is best for your based on your personal situation. Before you make a decision, we recommend that you seek advice from your accountant or financial adviser.

Interest rates can increase and decrease over time, and these changes can impact the amount of interest you pay on your loan. Variable and fixed interest loans also typically have different applicable interest rates based on the amount borrowed. You should consider the amount you intend to borrow and the impact of potential changes in interest rates on the amount of interest you may pay over the life of your loan.

If you believe that interest rates will fall during your proposed loan period, a variable interest loan may result in paying less interest over the loan period. If you think that interest rates will rise during this period, then a fixed interest loan for all or part of your loan balance may result in paying less interest over the loan period.

Cash flow considerations may also impact your decision as to which type of loan is best for you.

If interest rates rise during your fixed interest rate term, then you may pay less interest than if you have a variable rate loan.

Your interest rate is fixed for a chosen period of time and this is known as the fixed term of the loan.

During this time, your fixed rate loan is unaffected by changes to interest rates. Instead you will pay a pre-agreed amount of interest for the term of the fixed rate loan. 

Interest rates can decrease during the period that you have chosen to fix your interest. This can result in your fixed interest rate being higher compared to current interest rates. If you repay or make a lump sum payment to your fixed rate loan during the fixed rate term, then you might have to pay a fee (see 'Are there any other fees I should consider...' below). 

At the end of the fixed rate term, you can select either a new fixed rate loan or your existing fixed rate loan will automatically switch to the variable rate prevailing at the time. We will communicate to you prior to the expiry of your fixed interest rate term with instructions on how to select a new fixed rate loan.

When we agree to lend you money at a fixed interest rate, we do so on the undertaking that you will make certain fixed rate payments for the whole of the fixed rate term. If you decide to repay yourfixed interest rate loan before it matures you will still be charged the set amount of interest for the original term of the loan. This means that we will not refund the amount of interest that you have prepaid and you may be charged a break cost as per below.

If you decide to break or switch your fixed rate loan before it matures then you may need to pay an amount to us known as a break cost.

Break costs can be charged to your loan where you have sufficient funds available, in order to cover these costs. You should consider speaking to your financial adviser if you require clarity on the risks associated with terminating your fixed interest rate loan early.

How is the break cost calculated?

Please refer to both Clause 4A.3 of the BankSA Margin Lending Facility Agreement (PDF 813KB) and the Break costs Fact Sheet (PDF 119KB) for an explanation of this.

The other provisions of the margin lending facility between us continue to apply including any rights and obligations regarding termination. In particular, if the facility is terminated early (including under Clause 7.1 of the current terms) then you and any security provider must pay us for any losses or costs (including any break costs) we suffer. These losses are likely to be affected by the change in wholesale market rates, and the remaining fixed interest rate period when the termination occurs.