Credit Union Australia (CUA) / Heavy penalty for breaking out of fixed loan
Last year I spoke to my Credit Union Australia (CUA) Branch Manager about changing my Variable Rate Mortgage to a Fixed Rate. I was told at the time that if I were to switch back to the Variable rate I would incur a very hefty "break out" fee of around $25, 000. I was also told that if I were to sell my townhouse the "break out" fee could be significantly reduced or even waived.
Some months later I decided to sell my townhouse, keeping in mind that to sell the house would not incur the huge break out fee. I eventually found a buyer and a "Contract for Sale" of the property was entered into. I was told the following day that I would be liable for the break out fee, to which I informed him that I was told the break out fee did not apply when selling the house. I was told, and subsequently, checked this with the Branch Manager who said that I would incur a break out fee of over $30, 000 because I was selling the house and not intending to replace the existing mortgage with another one. I indicated that I was not advised of this fact during our previous conversation however the Manager just said that it had been the decision of "CUA Head Office" in Brisbane.
Due to the imposition of this horrendous penalty, to which I attribute a significant portion of blame on CUA, I now will have insufficient funds to pay a Bond along with the required 2 weeks rent in advance on a rental property. My family and I are now faced with having to sell our house (or we will be sued for breach of contract by the buyer if we pull out) and have nowhere to live, except for our large passenger van. All pleas to show reasonableness and compassion have fallen on deaf ears and I have to pay the balance of the mortgage PLUS the $30, 000 plus penalty on top.