Sweeping changes not a major issue
I call the Co Commonwealth Bank media de department, I’m about as we welcome as Tony Abbott is … we well, anywhere.
But that’s what I did this we week ... and I explained that, on this occasion, I was ac actually going to help them.
“So … we’re going to be fri friends today?” said the Co Commbank PR re representative with a ne nervous giggle.
“Oh, I think ‘friends’ is a lit little strong”, I replied. ( (Better to hose down her expectations from the getgo.) But I was going to help her sort out a bit of customer confusion. You see, in the past few weeks there have been media reports suggesting that Commbank is about to ‘sweep away’ the extra money customers have in their mortgage (otherwise known as a redraw facility). The media reports advised people to get their money out quick.
As you’d expect, this caused a lot of Commbank customers to get very worried. I know, because they’ve written to me, confused and in a panic, asking if they should take their money out of Commbank.
I totally understand why people are freaked out. After all, would anything shock you about Commbank right now?
However, let’s not hit the panic button just yet.
What exactly is this ‘sweep’ the CBA is going to do?
Let’s be clear: if you have, say, $100,000 in your redraw facility, they are not going to sweep that money away.
Instead, according to Commbank, they’re going to give you a little more ‘flexibility’. Because you’ve got ahead on your mortgage (by having that $100,000 in your redraw facility), they’ll kindly recalculate your minimum repayments and allow you to pay less each month. Sounds great! The trouble is that if you pay less each month, you’ll end up paying till the very end of that 30-year term. Which is exactly what Commbank wants (‘maximum loan term equals maximum interest’).
However, if instead you kept paying the same as before, you’d pay the loan off years earlier. Not good for Commbank. Very good for you.
Every dollar you pay off your mortgage should be seen as another step towards freedom.
Honestly, I really don’t think this is a major issue, and I don’t think it will affect many people. In fact that’s what the Commbank PR person said, and, for the first time in a long while, I agree with the bank.
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