Banks Changing the interest Rate?

[Value Emperor]

We've just received the mortgage docs to sign for our new ppor and reading through it I see something that concerns me.
It says "under this agreement variable rate, core variable and each margin may be changed without your consent. "
I understand the variable and core variable rate can change but I'm not so sure about the margin.?! We've negotiated a good interest rate because we had 25% equity, but if they can just change the margin whenever they want , why would we agree to that.
Has anyone else seen this or had it on their loan docs?

While I'm on the subject, we've gone for a loan with no set up or establishment fees, however there are still around $2k of fees including $1500 of registration fees. Is this normal or does it vary per lender?
Appreciate opinions .

 

[tobe]

its the golden rule,
'he who has the gold makes the rules'.....

If you dont agree, you could ask them to reissue new docs with your rate tied to the bank bill swap rate, or the reserve rate, however I dont like your chances of success.
Alternatively you could ask for a fixed rate instead.

Registration fees usually refer to registration of mortgage, perhaps this is part of the stamp duty?

 

[Rolf Latham]

We've just received the mortgage docs to sign for our new ppor and reading through it I see something that concerns me.
It says "under this agreement variable rate, core variable and each margin may be changed without your consent. "
I understand the variable and core variable rate can change but I'm not so sure about the margin.?! We've negotiated a good interest rate because we had 25% equity, but if they can just change the margin whenever they want , why would we agree to that.
Has anyone else seen this or had it on their loan docs?

While I'm on the subject, we've gone for a loan with no set up or establishment fees, however there are still around $2k of fees including $1500 of registration fees. Is this normal or does it vary per lender?
Appreciate opinions .

the reg fees will be gov fees and charges quite likely.

WAit till you bother to read the redraw provisions of most T&Cs.........most will use the offset after that

Commercial reality with moderate exit fees ( providing your loan isnt commercial or fixed, and below 80 % LVR) means that most lenders wont do anything stupid

ta
rolf

 

[Aaron_C]

If you took issue with every provision in the HL contracts you'll never ever borrow money. But that's commercial reality.

 

[Peter_Tersteeg]

If you've been watching the interest rates for the last few years, you'd be aware that often the RBA has reduced their rate by 0.25%, yet the banks have only passed on a portion of this.

This is essentially the 'core' rate being reduced and the banks margin also being changed.

It's a variable interest rate. The bank can change it to almost whatever they like at any point in time. They could increase your interest rate to 9% tomorrow if they want, but they don't because of the bad press and the competition available to borrowers.

This is common to all variable loans. If it's a problem, you could always opt to fix your loan.