Lawrence Money - February 13, 2012 - Opinion
Weasel words, phone calls at dinner time: call this service?
BANKS tend to shy away from those nasty words ''rise'' or ''increase'' so in recent years, when the NAB has written to say it is jacking up fees on one of my mortgages, it has used the weasel word ''change''.
In 2010, for example, it was ''Warren Shaw, executive general manager, NAB retail'' who advised that, ''following our annual review of your loan, your required repayment amount needs to change''.
Warren said monthly repayment would henceforth be $1789.35, but I had to dig out my bank statements to confirm that this in fact was a $12 rise.
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Last year it was ''NAB executive general manager Chris Bayliss'' whose letter lobbed in the mailbox. Yes, it was that ol' annual review again and, yes, my ''required repayment amount needs to change''. It was now $1809.21 and, although Chris didn't say so, this was another rise - up $19.86.
Small beer, perhaps, in the hyperventilated property world but it was somewhat irritating to see the NAB, within months, launch one of the biggest and most expensive advertising campaigns in memory, portraying itself as the people's friend among the big four banks. ''The other banks don't like us any more'' was the claim on billboards, the sides of trams, in the press, on radio and TV.
But, frankly, I didn't give a hoot what the other banks thought of the NAB, but I did care about that monthly bite. Instead of the advertising blitz, I would have preferred no ''change'' in my mortgage repayments.
There were other irritations, too. Last year we began to receive dinner-time phone calls at home from NAB ''customer service'' people, anxious to confirm that I was happy with my loan and asking if the bank could help me with any other financing or a higher credit card limit. ''No'' was the answer. And please stop calling.
However, it was the Reserve Bank rate cut of 25 points before Christmas that popped my cork. The big four, having moved faster than the Caped Crusader to jack up rates in the past whenever the RBA upped the numbers, hummed and hawed. It was possible, they said (until public outrage forced a retreat), that they might not pass on the cut.
Really? At the NAB the CEO was sitting happily on a annual salary of $5.3 million, and God only knows what was spent on the sniffly ''other banks don't like us'' campaign. Moreover, the NAB had saved many millions shutting down suburban branches, so my nearest branch was now 10 minutes' drive away. Yet the bank dithered when it came to passing on this small saving to the customer.
Treasurer Wayne Swan - with few other weapons at his disposal - had been exhorting disgruntled banking clients to ''switch lenders'' so, as a Christmas present to self, I decided to dip a toe in the water.
My credit union, which had just become a community bank, has a branch five minutes walk away, so I dropped in. They mulled over the $217,000 still owing - scribble-scribble k'ching: round it out to $220,000 and that would be $1653.60 plus $8 monthly service fee over 20 years. Really? That much less? And more than a year faster? What about annual fees, I asked, because the NAB charged an ''annual package fee'' despite the fact that the ''package'' had been signed and sealed more than eight years ago. ''No,'' said the bankmecu lady, ''no annual fees, no ongoing fees.'' And the cost of switching mortgages? Mortgage discharge, establishment and registration fees totalling $1047.40.
When I got home I grabbed the calculator: with 259 monthly repayments still owing on my NAB loan I would have paid - at the current rate of $1809.21 - $468,585. And the 21 remaining ''annual package fees'' would have totalled $8295. Paying off the NAB loan at current rates would have cost $476,880.
On the other hand, the switch to bankmecu - 238 monthly payments at $1653.60, one at $1652.93 and $1920 in monthly fees - would require payments (at present rates) totalling $397,129.73.
Hang on, I'll just check that again. Yes, that is correct: $79,751 less. A no-brainer really.
And I liked the way the paperwork for the new loan came through last week just as the Reserve Bank decided to leave the cash rate on hold - while the big four began squawking about why they were having to jack up their interest rates anyhow.