SAVVY mortgage customers using bank accounts to significantly reduce their monthly interest costs are about to slugged with a hefty charge for the privilege.
Many Bankwest customers have been left irate after the lender announced it would be gouging customers who have a “Lite Direct” offset facility $10 a month to help lower their interest costs.
Previously customers using the “Lite Direct” product would be charged a $3.99 monthly fee.
The bank which is a division of banking giant the Commonwealth Bank, announced to customers that from March 1 home loan customers would have to pay up to $120 per year to use an offset account.
Inundated by Facebook posts one furious customer, Trent Cope-Allen wrote, “As a long-term Bankwest customer (and former staff member), I am disgusted by your new $10 offset fee for all of your accounts that offset a mortgage.”
“This makes offsets useless for so many people, as if you don’t make a bit enough profit now.”
While another customer, Garth Hefferan wrote following the announcement, “thank you for reminding me to refinance to another bank”.
An offset account is a daily transaction account linked to a home loan account that helps reduce interest charges.
For instance on a $300,000 loan with $10,000 held in a offset account customers would only pay interest on $290,000.
Based on this, analysis by financial comparison site RateCity found a borrower paying four per cent interest on their loan they would only save $280 using an offset account once the $10 monthly charge applies.
The site’s spokesman Peter Arnold said the charge would leave many Bankwest
customers feeling rightly angry at being hit with yet another unnecessary bank fee.”
“I wouldn’t be surprised if we see Bankwest lose some market share on the back of this move,’’ he said.
A Bankwest spokesman said, “as always, we encourage our customers to contact us to discuss their particular situation so they have the most appropriate product to meet their needs.”
RateCity also found while many large banks charge an offset fee unless a customer deposits a certain amount into the account each month, there are more than 1300 fee-free offset accounts available.
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