Interest Rate rises on loans

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From: Anonymous


Hello all,

Just wondering if anyone else has the same situation with their lender as I do when it comes to interest rate changes.

When interest rates went down last year, it would take my lender one month to pass on the savings to us by lowering our interest rate. I was told by their customer service rep that the situation would be the same when interest rates increased (ie, we'd be given one month from the time the RBA raised interest rates until my lender increased our home loan rate).

But sure enough, when the official rate went up earlier this month, within a couple of weeks our home loan rate was increased. And they didn't even send us a letter to notify us of this change! We just noticed it through our internet access to the home loan today.

Are all lenders like this???

Anon
 
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Reply: 1
From: Robert Forward


Hehe, how else are banks going to make money. Just think only a few years ago it used to take banks up to 6-8 weeks to on pass interest rate cuts. In which they are buying the money at a cheaper rate and making a larger differential profit between the two rates.

The ACCC and RBA have pushed banks hard in recent years to get them to pass on the decreases in a faster manner. The Banks that I use passed the decreases on within 3 weeks, but yes, alas, the increases occur lots faster.

I see it is just a simple matter of the banks think they can make a few extra $$$'s in these periods so they do.

Cheers,
Robert

Get your Property Inspection Reports @
http://www.CreativeFinance.com.au
 
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Reply: 2
From: A C


I am currently writing to the ACCC about my bank doing exactly the same thing. Surely they have the power to stop this happening.
 
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Reply: 3
From: Russell Chellew


Almost all lenders use this tactic and I hope the ACCC can put a stop to it .

Another thing to look out for is that their are a couple of lenders who delay increasing their rates for up to a month (after official rate rises) . This ploy is used so that their rate looks more favourable in the interest rate tables in Major newspapers and they can capture new business. Unsuspecting new clients then get a shock when their interest rate rises after they sign up for the loan.

cheers

Russell
 
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Reply: 3.1
From: Rolf Latham


Hiya Russell

I suspect the ACCC cant do bugger all since by using various rate spread mechanisms different lenders actually create competition, or I suppose more like confusion.

But thats where an independent broker like yourself can help - to cut through all the mist and provide a clear picture without the smoke and mirrors that the lenders try to throw up. We are demisters :eek:)

Ta

Rolf

PS Straight translation for MIST in German is bull....
 
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