Test the lenders fraud yourselves:
(1) Ask them for weekly repayment on $ 100,000 loan for 30 years at 6% p.a. It would be $ 138.26 per week. In 30 years $ 215,685.60 would be repaid.
Now, tell them to assume they give the same 6%p.a interest on deposit.
(2) Tell them you will deposit $100,000 for 30 years. Ask them how much they will pay you every week (as return of principal and interest) for 30 years, but calculating the way they do for their best deposit option.
Definitely not $138.26. Those who have deposited their retirement money in 'Allocated pensions' would know it.
(3) Multiply the amount they will return each week by 52 (for 52 weeks in a year) and then multiply the result by 30 (for 30 years).
The difference between answer for (3) above and $ 215,685.60 payable for loan, as in (1) above, is the FRAUDULENT interest calculation they do
Alternatively, if you deposit $138.26 weekly for 30 years and if they have to pay 6%p.a as interest (just for argument sake), what it will become in 30 years.
You would have paid $215,685.60. It should become $604,323.88. This is what they get when they lend your repayments to another borrower.
What best you can do to solve the problem?
One should visit election venue. Take the ballot paper & but NOT vote.
So no penalty for not voting. No one else would cast your vote.
This needs a revolution.
Other solutions:
Send me an email, your thoughts to hariiyer24@gmail.com
Tell me what you want me to do further.
Speak to friends, families, colleagues, lower and lowest level employees at work place.
Consider selling the property and renting.
(This will trigger the bank to lose their compound interest and will make banks losing profits/fail).
Extending the term of loan would multiply interest much more. So the TV channels suggest borrowers to 'extend' the number of years to 35 years or 40 years of loan.
Someone asked, ‘What if a group of people all default their instalment repayment for one month at a time?".
A default of one month will not lead to losing the property. It will not result in huge amount of additional interest. No offence committed.
Lenders hedge their loans with bigger lenders.
So the default by a group of people at the same time, will cause a huge impact to the bigger lenders”.
What the Government says?
Treasurer claims that Public have ACCEPTED compound interest.
May be so when you were not fully aware of the impact on you and the availability of alternative justifiable methods of interest calculation.
But if you still accept it, ignore whatever you read.
Now if you don't accept, then;
You can take it up with your local member of parliament.
Tell him/her that your "repayments should be applied to Principal and Interest in the ratio of the amount owed to each of them at the time of each payment".
OR
Demand a legislation making simple interest mandatory.
(If simple interest is mandatory, no concerns about increase in interest rate, as Simple interest will not automatically require an adjustment to your repayment.)
Demand to REMOVE Regulation 33F, supporting compound interest.
DEMAND legislation for mandatory disclosure of the equivalent Simple interest rate.
(Both above have the same effect.)
What the lenders can compensate for?
Those who repaid fully, may seek repayment of excess paid.
What about those that lost homes and/or families due to default in repayments? (when the default is due to defective calculation of Interest?
Any one that can translate this site in other languages please do so.