ME Redraw

I agree
But if you dont have a choice, second tier lender may be the only option

 

Westpac and other majors have been doing the complete opposite to ME for years. As rates fall they didnt reduce payments and many were paying far more off the loan. Only now westpac have realised and sent letters out reducing repayments making it look like they are being nice. They are just using COVID as a excuse and the letter reads like a wonderful gesture. Those savings are a lie and mean the past overpayments (redraw or not) are being applied to reduce future payments so that the original term is extended back to its original date. Really dishonest and I ran calcs and they stand to make $30K more interest on a $158K loan balance. By disregarding it the loan term becomes shorter. Like 8 + years shorter.

I suspect ME have a failed computer system and arent admitting it. It wasnt keeping track of debt and duration. They allowed customers to pay more and likely recalculated the lower repayments based on the new lower debt rather than the amount of redraw PLUS existing debt. Its like a client I have who was on IO loan for the first 5 years and they never changed it to P&I. Aftre another 10 years they realised and told him he had to repay the loan in the remaining 15 years since the original terms was 30yrs. The repayments were to double and there was no way they would extend the term. Lucky he settled a legal dispute and was paid a settlement and could discharge the loan. Irony was the legal dispute was same lender who also waived the debt in dispute (Commsec advice) and paid damages. He was happy to see the back of CBA.

 

I'm happy I'm with CBA. They seem to be the only lender in town who are allowing an extension of he term in tandem with mortgage deferments.

 

ME Bank reverses course on redraw policy change