Pepper Money reveals market leading fixed interest rate product with real life flex and no break fees

Posted: 17-04-2023

  • Non-bank Pepper Money has unveiled a unique and limited time offer that delivers a fixed interest rate home loan with no break costs.
  • The feature led solution offers all the benefits of a capped and competitive interest rate, giving customers repayment certainty while rates are rising, supported by the benefit of a variable interest rate loan, if rates drop.
  • The two-year fixed interest rate is offered at parity with the corresponding variable interest rate – starting from 5.59% p.a. (comparison rate 5.77% p.a.)^.

In response to market conditions, Pepper Money has innovated its fixed rate home loan option to deliver the real life flexibility customers are seeking. The unique offer is designed to provide customers with peace of mind when it comes to their home loan as they will be able to lock in a competitive interest rate for two years without having to worry about the additional break costs that most traditional lenders impose. Customers have the flexibility to make extra repayments to pay down their loan faster or switch to a variable interest rate option at any time without incurring break cost fees, which in some instances may cost tens of thousands of dollars.

According to Pepper Money’s General Manager, Mortgages and Commercial, Barry Saoud, the progressive product offer was developed in response to borrower sentiment. “Our research shows borrowers want rate certainty to help with increasing living costs pressures and the potential for further cash rate increases.”


We understand that customers value flexibility when it comes to managing their home loan, and that’s why we’re thrilled to introduce this new offer which gives customers a competitive interest rate and certainty for two years that their rate won’t change - but also provides the freedom to make changes to their loan without incurring any significant additional costs.


Last month, the RBA warned of more rate rises in the coming months and have forecasted more than 800,000 Australian households are likely to face further financial pressure as many come off their existing fixed rate loans to more expensive variable rates in 2023.

“We know many Aussies are anxious about how they would cope and are looking for greater certainty given the potential for further rate rises on top of the ten RBA cash rate increases already announced,” he said.

Mr Saoud says, Pepper’s timely solution eases the pressure and anxiety of rate increases. “We’re offering Australians impacted by real life cost of living pressures repayment certainty – giving them one less thing to worry about.

“Your customers can enjoy the certainty of a fixed interest rate loan while rates are rising and may elect to benefit from the flexibility of a variable interest rate loan should rates drop. So, if the market moves, your client can too.

“As far as I know, today we are the only lender in the country with a proposition like this: a 2 year fixed rate option that is at parity to the corresponding variable rate with no break fees, and is available across the full credit spectrum - prime, near prime and specialist options. It’s a no brainer in this environment,” he said.

“Our approach to product innovation is grounded in our mission to help people succeed. So, as we listen to our brokers and their customer needs and concerns – we are able to act quick. Two of Australia’s largest aggregator groups welcomed the product innovation and flexible approach.

Michael Goerner, Head of Connective Home Loans said: “Continual product and policy innovation which better places broker to deliver real solutions for their customers as market conditions change is one of the most valuable qualities in our partnership with Pepper Money, funding our “Solutions” brand. They have made it easier for brokers to help their clients.

“For all those clients rolling off fixed rates that are looking for next steps, this is a really good solution and with no break costs it is an absolute safe bet each way, rates go up and you are sheltered, rates go down and you are okay to jump off and ride the rate slide with no penalty,” he said.

Hayden Cush, National Sales Manager of AFG Home and Commercial Loans also welcomed the innovative solution: “The Pepper Money team have consistently been a market leader with their product innovation, and ability to produce products that meet market demands in an everchanging lending environment.

“Given the aggressive nature of the RBA rate increases since May last year, a number of consumer household budgets are being stretched, and will continue to be stretched, with further rate increases still expected.

“The new fixed rate offering now available via our Options suite (funded by Pepper Money) comes at a time when consumers may be looking for some certainty in their outgoings,” he said.

Brokers also echoed the support for Pepper Money’s flexible and timely solution in the current environment.

Director of Xcel Finance, Kimberly Linder said: “This product flexibility is a testament to Pepper Money's innovative strategies. They have listened to their customers and once again come up with a solution. This is exactly what mortgage holders are seeking in this current rising interest rate and rising cost of living environment. It also allows the flexibility to break the fixed rate with no penalties should rates start to drop.

“As a Broker of 15 years, I have never come across such an innovative product that provides both certainty and the flexibility to change if markets change,” she said.


Pepper Money’s unique fixed rate product innovation (new applications, for a limited time):

  • Fix a 2 year loan option at today’s variable interest rate (no additional loading)
  • No break costs
  • No limit on additional repayments
  • Rate lock the interest rate for 90 days (a rate lock fee applies)
  • Available on Prime, Near Prime, Specialist (Full doc and Alt Doc)
  • Applies to new owner occupied, investor, IO and P&I applications
  • Up to 4 loan splits with ability to take advantage of an offset sub-account (applicable on any variable interest rate portion)


Information is correct as of 17 April 2023 and subject to change at any time. Information provided is factual information only and is not intended to imply any recommendation about any financial product(s) or constitute tax advice.

Applications are subject to credit assessment, eligibility criteria and lending limits. Terms, conditions, fees and charges apply. The actual interest rate will depend on the borrower’s circumstances and the information verified during the loan application assessment.

Pepper Money’s fixed interest rate promotion is available for new home loan applications not submitted previously to Pepper Money. Applications must be submitted between 12:00 am AEST 17 April 2023 until 11:59 pm AEST 12 May 2023 and formally approved by 5.00pm AEST 19 May 2023 (Promotion Period). A Fixed Interest Rate Lock Authority form will need to be submitted prior to 19 May 2023 to lock in the fixed interest rate for 90 days, otherwise the fixed interest rate at settlement will apply. Home loan applications lodged after the Promotion Period will be offered the current interest rates then applicable. Offer is not available to existing Pepper home loan borrowers. This offer is subject to change, may be varied or withdrawn at any time.

^ Comparison rate is calculated based on a secured loan of $150,000 and a term of 25 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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