Some market logic has been known for ages.
One of them says that crisis brings lower prices of goods and services. Consumers have less money, they think twice before spending them. Should the seller want to avoid going bankrot, he simply has to go down with the price. Why does it not apply to mortgages in a newly developed economies, like the Czech Republic?
Mortgage applicants face much higher interest rates than last year. Whereas 100% mortgages could be easily obtained at 5,5% as late as last December, the most popular mortgage lender – Hypotecni banka currently lends out for 6,74%. That adds a considerable amount to the monthly payment. But that is not all. Various tricky fees for compulsory mortgage accounts, credit cards, insurance could eat up additional part of the family budget. Being a mortgage applicant, I do not need to worry only about whether I will get the mortgage or not. If the bank does approve the loan eventually, I have to endure useless products.
Wages have been frozen at best, lay offs are frequent, the end of the crisis is not around the corner. One would think less applicants will bring the loan cost down and drag the quality of services up. Even the Czech national bank has decreased its basic rates to historic minimums. There certainly is a room for rates and fees lowering. So where is the problem?
Czech banks got used to treating customers from the position of power. Ridiculous fees are piling up, products have strictly binding conditions, regular customers face ever more expensive services, even though one would think this does not make economic sense. So what is the consumer’s response to all that? Most of us still accept this behaviour as inevitable. A bank is too powerful, my voice changes nothing, most figure. Indirectly, we are encouraging the banks to step up this tactics. Less business is being compensated by higher cost.
Banks’ behaviour cannot be changed overnight. Letting the banks know that charging extra fees and pushing the rates up during critical times is not acceptable. Honzovahypoteka.cz is the place where you can start making the difference.
Article Source: http://www.ArticleBlast.com
About The Author:
Author is a project manager at http://www.honzovahypoteka.cz
