Quote:
Originally Posted by Cecil Terwilliger
It’s because all the calculators you speak of say your penalty will be a certain number but the banks use a posted rate, a number which has absolutely no bearing on the interest rate and isn’t even a real rate offered to clients, to falsely inflate the penalty by calling the real rate a “discount”. Except it’s not a discount. It’s the rate everyone gets. The posted rate is bull####. It exists to screw over consumers when calculating penalties.
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That’s it.
I absolutely understand the thin margins on mortgages and why banks would protect themselves. I also know those margins are going to get thinner, so the pressure is on.
Trouble is, if the bank were going to make 5k off their customer, after the fun with numbers they charge 10k or 15k. And they arrive at that penalty using posted rates and discounts that most customers don’t know and can’t know til it comes time to pay it.
‘Sorry Ms Customer, you got an imaginary 1.5% discount before, and now we’re only offering imaginary 1% discounts, so I’m afraid you’ll have to pay an extra .5% penalty for risk we never took and profits we’d otherwise never had made. But hey. You shoulda seen it coming.’