Quote:
Originally Posted by Bend it like Bourgeois
Is there a defence worse than ‘we’ve made it deliberately incomprehensible to you, so it’s your fault you didn’t take steps to comprehend’?
Even if there were a way for consumers to understand it, its a hugely inflated number that’s designed to screw their customers. I hope the banks and brokers take it on the chin.
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It isn't deliberately incomprehensible. Banks own websites have calculators for you to figure it out.
It's important to the bank because banks make money on fixed rate mortgages buy borrowing money on the market and lower rates than you can access. So if they borrow on a 5 year rate to cover your 5 year mortgage they lose money if you don't meet your terms.
The end result of getting rid of IRD is higher fixed rate or higher fixed penalties. There is a reason that open mortgages are more expensive everywhere than closed mortgages. It's because they are more costly to operate.
Again if you don't understand IRD you should not sign a mortgage document without legal review.
This isn't a monopoly situation where you are forced to buy a closed fixed rate product from one bank. You have a choice of lenders and a choice of products.
It's Grade 9 Math FFS