Home loan tricks deliver profits to the banks
There are plenty of ways for banks to maximise the profits they make from your home loan.
The standard home loan term has crept from 25 years to 30 years. Extending for an additional five years means much more interest being paid.
Honeymoon or headline rates can conceal a higher rate when the period is over than you might have got by negotiating with the bank at the start. Usually it will revert to the standard variable rate, itself up to 0.7 per cent more than banks happily offer to almost everybody else.
Honeymoon deals can also come with higher fees – a dead giveaway is a gap between the advertised and comparison rate.
Source: The Age