Banks making more on interest rates but give us back ATM fees!
Some good news this week with all the major banks deciding to scrap those annoying ATM fees we are charged when using another banks machine – so no more driving around looking for your banks machine to save that $2…whilst probably spending $2 in fuel to find it anyway. This only relates to the big 4 banks at this stage, so look out if using a Bankwest or other bank owned machines – like RediATM – as you will still be charged for using those ones.
Whilst this is good news for consumers, it does little to make back all of the recent interest rate increases for interest only loans and investment loans that must be making the banks an absolute fortune – and all under the guise of trying to limit ‘future’ investment lending growth numbers. Essentially APRA have told banks to limit investment lending growth to 10% annually and now they have put a cap of 30% on new interest only loans.
This may have some merits to slow and manage future lending but how does the bank increasing rates for existing clients who have these types of loans help do anything but make the bank more money? Yes it will make it harder for existing clients to borrow more money to invest due to their serviceability now being lowered but only because they are paying additional money to the bank. It feels more like a tax but this time the banks are the ones collecting it. Hopefully over time this will also start to wind back and we are seeing some better deals with some banks.
So, if you want us to look into your own scenario for you, just let us know.
Tim Grose, Managing Director