Slashing your debts

of rates going up, you wouldn’t be charged the penalty.

A. Broadly speaking, you’re right.

I did say, two weeks ago, that lenders are likely to let borrowers off the penalty in these days of rising interest rates - because they can then lend out the money again at a higher rate. But the situation is more formalised than when I last inquired.

To get more detail on this, I surveyed the major banks by email. The following responded: ANZ, ASB, BankDirect, BNZ, Kiwibank and National Bank.

All of them, except ASB/BankDirect, generally allow extra repayments of up to 5 per cent a year without penalty, but there are a few complications.

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