Interest rates in New Zealand – Investigation into rip-off break fees.
(Is that too much of a Tabloid Headline???)
Apparently the Commerce Commission and Banking Ombudsman are looking to launch an investigation into the hideous break fees the New Zealand banks are charging their customers to get out of horrendously high fixed- rate mortgages.
It’s about bloody time.
It’s not that I disagree 100% with break fees – after all – if the rates go up, we as the customer get a good deal and the bank takes the hit – but to insist on them now – with the financial crisis causing absolute chaos for everyone – well, a bit of common sense and decency wouldn’t have gone amiss.
According to the Sunday Star Times today, they have found that to break a $200,000 mortgage, fixed for 5 years in 2007, break fees charged by the different banks ranged from $8,000, up to a whopping $21,000.
“Consumer NZ chief executive Sue Chetwin said the discrepancy suggested borrowers were being ripped off, and welcomed the Commerce Commission investigation. She could not see how one bank could justifiably charge a break fee three times higher than a competitor.”
Kiwibank and Westpac are the worst offenders. Funnily enough – I too used the term “rip off” when my Westpac account manager told me he wanted a sickening $46,000 to break a 5 year mortgage of $465,000.
Apparently the banking ombudsman has received a barrage of complaints about this – so many that they are considering introducing a waiting list to deal with them all.
Whether or not this will result in the banks being taken to task and having to refund the break fees no-knows. But to be honest – I actually think it’s about time someone took a very close look at the charging practices of the New Zealand banks anyway.
And given that they are all insisting on the break fees being paid – I sincerely hope that not one of the New Zealand banks has the gall to ask for a Government Bailout. I fail to see why it’s is so far the Banks and Big Industry that are getting bailouts all over the show, and yet we as the public have to cough up every penalty charge imaginable. We can’t seem to use the excuse that there’s a financial crisis going on!
Related posts:
- Interest rate break fees – Labour is kicking up a stink.
- Will New Zealand’s interest rates fall again this week?
- Why exactly should interest rates in New Zealand go up?
Comments
One Comment on Interest rates in New Zealand – Investigation into rip-off break fees.
-
Interest Rates » Avalon’s Blog » Blog Archive » Interest rates in New Zealand … on
Sun, 18th Jan 2009 3:18 pm
[...] Read the rest of this great post here [...]
Tell me what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!
Avalon’s Guide On Facebook
-
