Interesting point Diver Dan- though it wasn't actually me who asked- merely disassociating it from an argument of wage justification.

*which would consist of the entire profit if nationalized, as opposed to a portion of it.*

You seemingly haven't thought that one through very well, Hazza.
For we know what happens when Govts start to nationalise things,
overseas investors run a mile. Venezuela plays these games,
they also pay 15-20% interest, sometimes more. Fact is,
given that we borrow so much and don't save much, around 40%
of bank money comes from offshore, so our banks have little
say in the rate. No confidence in the econommic policies of
our govt would mean higher and higher rates, given the increased
risk.

Gypsy, you certainly can obtain a fixed rate mortgage, for 10
years if you want. The longer the fixed rate, the more you
pay, given the increased risk to the bank. They don't set the
rates, overseas markets do.

Higher purchase is different. The rates and margins are much
much higher. The 12% or so that they charge, would cover any
increase in interest. Not so for housing loans, where margins
are extremely slim.

There is a solution to all this of course. If Australians saved
more and the treasury allowed for inflation in their tax payments,
then more Australians would save and there would be no need to
import so much money.

Yabby when I purchased my current home 18 months ago I fixed my mortgage for 3 years. At the time variable intrust was around 4.9%.
By fixing I had to pay 6.9% which I did not mind doing as I believed that would be the total amount of intrust I would be paying each month for the entire fixed intrust portion of the loan. Each time the RBA increases the intrust my intrust went up as well. I pay my mortgage weekly by direct debit from my account. To date I have paid an extra $13,890 above my normal payments, they come of the back end of my mortgage loan, not off the principal. Yes my mortgage is with the C.B.A. I am 61 years of age and realised if when I retire I could not afford private rental on a pension, so I found a cottage by the sea in country Victoria at a price I could pay off before retirement. But as fast as I make my payments and show my mortgage receding intrust rates go up and the time it will take to pay off increases. I can understand the RBA altering intrust rates in line with inflation, but the big 4 banks should not be allowed to increase it further as they have been doing. They are demonstrating signs of being a banking cartel.

*Yabby when I purchased my current home 18 months ago I fixed my mortgage for 3 years*

Gypsy, something is wrong here. Perhaps a visit to your bank manager
could clarify it.

If you took out a 3 year loan, fixed at 6.9%, that is all that they
can charge you. So I would find out where the wires are crossed,
for clearly there is a problem.

Yabby the contracted mortgage loan term was 14 years. When I took out the loan the interest rate was fixed at 6.6% P.A. for the first 3 years
Repayment Type - Pricipal and Interest
Interest Rate Type - Discount Rate Expires 13/02/2012
The current interest they are now charging me is 7.13% P.A.
Not sure what the new interest rate will be after the recent interest rate increase by both the reserve bank then the commonwealth bank.
By my calculations the fixed interest term should not end until February 2012.
As at today my loan payment is $14,174.31 in advance.
My understanding of the interest rate is, the interest was set at 6.6% until 13/02/2010. My question is how can the Commonwealth bank increase the interest rate to my loan prior to 13th February 2012.
Hopefully the above information will make it more clearer to understand.

http://www.smh.com.au/business/use-your-brain-before-joining-the-lynch-mob-20101105-17hfm.html

Ross Gittins brings a bit of perspective to the hysteria being
generated in the common press about banks.

Gypsy, I can't really go into your indivual situation on here.
Its not appropriate for other users and you are the one with
all the documents and facts.

The thing is, if you agreed to a fix term for 3 years, then that
is what the bank has to charge you. Don't be afraid to go and
sort it out with your bank manager, that is what he is there for.

You pay them a fee for services, so are entitled to clear answers
if there is a problem. I've bargained down fees with them,
none of them have ever bitten me, so they are housetrained and
quite safe :)

.