What is a ‘Clawback’
A clawback is an action whereby a benefactor takes back money that has already been disbursed, sometimes with an added penalty. In the context of lending, it typically refers to a lender taking back commission monies that were paid to the introducing broker.
How might this affect you as a borrower?
If you fully repay the loan (causing a loan discharge) in the first 24 months after settlement (when the loan is advanced), or you don’t make the prescribed repayments on your loan, then the lender may charge Naritas (as your introducing broker) a fee known as a ‘clawback’ because we have introduced an unprofitable loan to them. Full repayment of the loan is most commonly associated with the sale of the collateral property (where the loan is not ported to a new collateral property) or a complete refinance away from the existing lender.
Lenders charge us up to 1.1% of the loan amount in the first year or 0.385% of the loan amount in the following year. If we are charged this fee then we will in turn charge this to you. We only charge you a clawback when one has been charged to us by the lender.
If you feel this may be a problem then please let us know up front as we may be able to provide you with alternative lenders or products that have a shorter clawback period or that do not have a clawback provision.
Have further questions? Need assistance with a finance approval?
The team at Naritas are experts in delivering timely guidance & finance approvals. We have over 100 lenders on our panel & a high quality team of dedicated credit advisers to steer you efficiently through the approval process.