What the ACCC Report discovered was that the older the mortgage, the higher the interest rate you pay when compared with newer borrowers.
That not all customers pay the same interest rate. Loyal customers pay MORE than New Customers.
It is like saying when you go to the supermarket, the longer you have been a loyal customer to the store, the more you pay. While first-time shoppers get a discount, loyal long-time customers pay a premium!
So, if you haven’t reviewed your loan in the last 2-3 years or longer– then according to the ACCC’s figures – there are thousands for you to save!
The reason for this is that bank mortgages are priced at a discount to the standard variable rate. However, these giant discounts are NOT readily offered to existing customers.
Instead, MASSIVE DISCOUNTS are hidden away from the banks own loyal customers.
Loyal Customers Are Charged MORE
I can’t think of many industries where the loyal customers are charged MORE than the “Johnny come latelies”.
Typically, most industries bend over backwards to keep and reward their loyal customers, but as we keep saying – Banking isn’t just “ANY” industry and it plays by its own rules.
In bankers speak they refer to this as their front book and back book. The front book is made up of their cheapest rates that have been offered to their most recent customers. While the back book is full of expensive home loans that those loyal suckers, err sorry customers continue to pay year after year!
This is how the banks lure in new business – they advertise these seductively low rates to draw in new business.
Meanwhile their old “Loyal” customers are kept in the expensive back books where the banks can continually squeeze every cent possible out of the customers too loyal to review their lending arrangements.
Often those loyal chumps, err customers, typically think that the discounted advertised rate is what they are paying, but nothing could be further from the truth.