Westpac

[pooxs]

Why is there such a fuss about Westpac raising their interest rate? Yes, it's going to cost you more, but if you're not happy then go somewhere else!

How is it any different from any business deciding they aren't making enough money/want to make more money and putting up their prices? If you like the product and can afford the extra interest stay

Comments

[ataxi]

Hmm. Well, I can see why it pisses people off.

Refinancing a mortgage is a major pain. The amount of work involved would earn you thousands in a professional capacity, and there are often large exit penalties as well as the fees to establish a new loan. So there's not really a great deal of sense in exercising your rights and switching banks until things get very, very unbalanced.

Having switched there's no guarantee that the new institution won't unilaterally change its own rates shortly thereafter, leaving you where you started.

And of course, you can't simply opt not to have a mortgage without completely overturning your affairs.

You're basically in a supplicant's position with your bank, praying they don't decide to fuck you over. Of course, if they do screw you too badly, the limited competition in the sector does give you other choices - of a sort. During the worst of the GFC the government allowed major mergers (Westpac / St George and one other one that eludes me) to preserve Australian banks, which then turned out to be ok all along. A lot of the smaller lenders (RAMS, Aussie etc.) got nuked and are now limping along at best. So things have tilted heavily towards lenders (of course, the banks themselves have it bad on the other side of the ledger).

No one likes to be forced to pray not to be fucked over! Only thing is, they prefer it to not owning houses at all which is the alternative.

[pooxs]

that's essentially my point - if you didn't get a fixed rate because you were too greedy and hoped the rates would go down don't go complaining about someone else being greedy and wanting money from you when they go back up

and yes, well aware of the cost and time invovled - my Dad's a financial planner (he doesn't like the term morgage broker because those people are scum and he does a good job)

[japester]

although the variable rate has dropped quite significantly, the fixed rates have hardly changed over the last two years.

If only it *were* that easy.

[pooxs]

I can see why it pisses people off also, but it doesn't negate the fact that the people put themselves in that position, as you said.

[ataxi]

I don't think it's the cost so much as the lack of control that bothers people.

Especially since many lenders don't have a fixed position in the price league - they'll bid low to attract more borrowers and build up a base, and then push back up the league once they've got a few more on the hook.

Contracts where the amount changing hands can be altered by one party at any time are dodgy to my mind, although I appreciate the credit market has an absolute need for price flexibility in order to succeed at all.

This sort of thing just shits you if you're a Westpac customer (I'm not) - suddenly you're dealing with a $500 or $1000 p.a. cost that the customers of other banks are not.

[wintal]

What we need is the equivalent of an adsl churn service for banks - a way to quickly and easily change providers. And yes, if you're comparing to the adsl churn process as an _improvement_ then the existing system has to be pretty fucked.