So, what's changing?
Home Loan Terms and Conditions dated 6 December 2024
We are including additional clarity in our Home Loans Terms & Conditions about repayments on interest only loans (variable rate and fixed rate) with the inclusion of Clause 11.3.
Clause 11.3
11.3 If:
(a) your Loan is a variable rate or fixed rate ‘interest only’ Loan;
(b) you have opted to make repayment by direct debit of the minimum monthly payment; and
(c) you have made additional repayments above the minimum monthly payments such that the Unpaid Balance of your Loan Account is less than the Loan (an In Advance Amount), then
repayments will first be taken from the In Advance Amount before any direct debit of the minimum monthly payment from your nominated account. This will continue if your Loan changes from an ‘interest only’ Loan to a ‘principal and interest’ Loan unless you give us instructions to change your repayments.
So, what's not changing?
While our Home Loans Terms and Conditions will change, the purpose is to provide clarity around how payments currently work for our interest only loans.
There will be no changes to your loan or current repayment types, amounts or dates.
The way you use your account, our mobile app and internet banking will not change.
How do home loan repayments work when my loan is in advance?
What interest type and repayment type determines how repayments are drawn and applied.
Principal and Interest Loans
| Repayment Type | Loan is not In Advance | Loan is In Advance enough to cover a partial repayment | Loan is In Advance more than the next repayment |
|---|---|---|---|
| Direct Debit and Direct Credit: automatic scheduled payment or manual payment |
Payment will be applied to the loan to satisfy the repayment. | In Advance position will be deducted to partially satisfy the repayment. Full payment will be debited, applied to the loan to satisfy the balance of the repayment and the remainder will sit In Advance. |
Repayment will be satisfied from the In Advance amount. Full payment will be debited, applied to the loan and will sit In Advance. |
Interest Only Loans
| Repayment Type | Loan is not In Advance | Loan is In Advance enough to cover a partial repayment | Loan is In Advance more than the next repayment |
|---|---|---|---|
| Direct Debit | Payment will be applied to the loan to satisfy the repayment. | In Advance position will be deducted to partially satisfy the repayment. Balance only to be satisfied by Direct Debit. | Repayment will be deducted from the In Advance position. No Direct Debit will be processed. |
| Direct Credit: automatic scheduled payment or manual payment | Payment will be applied to the loan to satisfy the repayment. |
Repayment will be partially satisfied from the In Advance amount. Full payment will be debited, applied to the loan to satisfy the balance of the repayment and the remainder will sit In Advance. |
Repayment will be satisfied from the In Advance amount. Full payment will be debited, applied to the loan and will sit In Advance. |
How can I get more information?
We’re here to help, so if you have any questions about this change or would like to learn more about repayments, please call us on 1300 228 228, email mail@bcu.com.au or visit your nearest branch.