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About 40,000 customers could be eligible for refunds from one major bank, after being over-charged on interest for their home loans.
Big four bank Westpac failed to properly switch interest-only accounts to principal and interest following the expiry of the interest-only term, according to a statement released this week.
Customers can expect the bank to refund excess interest already paid and a a lump sum to make up for future interest payments on the principal loan amount that had not been reduced.
The refund and remediation process is at the stage of about two-thirds of affected customers being notified.
“Westpac continually reviews its products and services for customers. As part of this, we identified a mortgage processing error which led to customers continuing to make interest-only repayments on their mortgage instead of being switched to principal and interest repayments at the end of their interest-only period,” Westpac said in a statement to Smart Property Investment’s sister title, Mortgage Business.
Westpac will contact all customers who have been impacted, meaning they do not need to do anything to receive the refund.