Absa’s loyal milch cows
OVER THE past few months Absa’s administration fee for mortgages has quietly soared sky-high. In a recent letter from Absa, the admin fee for my mortgage was R7,98/month on 1 April 2008. On 1 May the amount had been increased to R14,82 (mentioned in passing in fine print in the annual mortgage statement) – at the time an increase of “only” 85,7%. Now, on 1 August, it was increased to R28,50 – a further increase of 92,3%. So the increases between April and August total around 257%. How’s that possible, especially at a time when the consumer is already suffering under the burden of interest rate increases and inflation?
The reasons are given as being the numerous challenges in the mortgage industry. Nice and vague – and those of us who pay again have to wonder whether we aren’t having to make up for those who don’t pay, as is usual in our country.
Absa doesn’t say it in their letter but I understand this increase only applies to mortgages of more than R500 000. If that’s so, can anybody give me a reason why it costs more to conduct the administration of a loan above R500 000 than one under R500 000?
The highlight of the correspondence that I always receive from Absa is the “valued client” part. Be careful never to become a valued client: it’s just another way of saying “loyal milch cow” – even from as far back as the days of Volkskas. Loyalty in the banking world comes only from the side of the valued client.