A lot of the time I think about all the great things you can do as an adult. I can eat chocolate icecream for dinner and there’s nothing anyone can do about it! It may be unhealthy for me but it’s my choice to make and that is something great about being an adult, you get to live life the way you want to. Based on that thinking I thought I might start a regular feature (not quite sure how regular) on my blog about the good and bad things about being an adult.
Today’s post isn’t actually about icecream for dinner but about having to deal with banks as adults.
A few years back, Jarrod and I started looking into buying a home. One of the first things we did was investigate whether we could get approved to borrow money. As it turns out, we could! YAY! So off we went and bought a house – no, it wasn’t just as easy as that. At the time of choosing a loan the interest rates were pretty decent (the best they had been in a while) so we decided to get a 2 year fixed term to lock that rate in. This did place one, fairly important, restriction on the loan. We could only put up to an additional 5% of the total loan amount in repayments each year.
If we had known that interest rates were actually going to go down we would never have fixed the loan and just thrown as much money as we possibly could at it. Obviously, the bank wasn’t going to suggest that to us though! They make money out of all that extra interest we paid!
So 2 years have passed and we eagerly awaited being able to put a lot more extra money on the loan and also the decrease in our interest rate. The day came and I logged into the bank and… it had only decreased by .07%, not exactly the game changer we were hoping for.
I looked at the website and could see they were offering much lower interest rates and decided to investigate why this was. I sent a message off to the bank asking why ours was still so high and they got back to me to say they couldn’t definitely lower it if I wanted. I wondered why they were so willing to lower it and why I was given the choice, obviously I want to pay less interest!
As it turns out the rate it reverted to was the rate that we would have been paying if we had a variable rate in the beginning. Although interest rates have decreased substantially since that time they reverted ours back to what it would have been 2 years ago and, I assume, just hoped we wouldn’t care or notice (and I’m sure many people just assume they’re paying the right amount). It feels very dodgy to me and made me distrust the bank somewhat. I also wondered what would have happened had interest rates increased during those 2 years? I can pretty much guarantee the interest rate would automatically have been placed at the higher amount.
One positive is that the experience I had when contacting the bank was a good one. Everyone was helpful and happy to answer all of my questions (which there were a lot of) and we have come out of it with a lower interest rate. However, it does highlight that you always need to be watching and vigilant when it comes to banks to ensure you’re paying the best amount and not getting slogged with a bunch of unnecessary fees.
While I’m glad we have banks so that I had the opportunity of getting a home loan (and personal loans before that), the dodginess is just one part of adult life you have to be watching for.