Over $1 million in overcharged break fees has been given back to home owners after a Commerce Commission attack on credit lenders.

The Commerce Commission has spent 18 months examining the fees that banks charge from consumers to pay back their fixed rate loans before time.

This followed a propel of grievances when the steep decline in interest rates in late 2008 and early 2009 noticed several customers eager to break their fixed-term home loans early.

Kiwibank was discovered to be the most horrible crook, estimating break fees with a method that violated the Credit Contracts and Consumer Finance Act (CCCF Act).

The state-owned bank rectified its method during the inquiry and refunded customers $689,000 in ex-gratia payments.

HSBC was also cautioned regarding its formula and has reimbursed $113,000 in ex-gratia payouts.

Non-bank lender, Foundation Custodians is also repaying $200,000 to 35 consumers after confessing that its fees for premature loan reimbursements infringed the CCCF and Fair Trading Acts.

Other leading banks, ASB, SBS Bank, BNZ and National Bank, were innocent for their break-fee estimates during the period as they determined fees based on the amendment in retail interest rates.

Break fees, or prepayment charges, are taken to recoup lender losses when a customer refunds a loan before time.