Belfast Telegraph

As a matter of interest, how do banks arrive at exorbitant rates?

By Robert McNeill

This'll get your goat: the banks, eh? There you are. That's your goat now so got it can barely turn its beardie face.

And I'm the same. Even the word "bank" turns my beardie phizog into a grimacing splodge of modern art, a great angry swirl of purply colours and randomly splashed angst.

You rise to interject: "What is it now? We all hate the banks. But there's nothing we can do. As society has progressed, and we have become more free, we cannot do anything about anything any more."

I agree and, personally, I blame Strictly Come Dancing. But I accept there may be more complex factors at work.

To answer your first point, what it is now is the rate of interest charged by these crooks and swindlers for mortgages. This week, both top and bottom commentators alike speculated that more banks could charge mortgage borrowers as much as 7% interest. Indeed, some are already doing so, on low-deposit, fixed-rate deals.

So, answer me this: how come a big fuss is made of the rate set by the Bank of Englandshire, when the banks still charge miles over that? What's the point of the Bank of England's interest rate? Is it merely some benchmark above which the banks decide how much to add on?

If you're an economist, perhaps you're tittering and saying: "He doesn't understand." Correct. I don't. But I think I speak for the common chap or burd in my ignorance.

I put it to you again: if the interest rate decreed by the Bank of Britain - sorry, England; so easily confused, aren't they? - is 0.5%, how can these sods be charging up to 7%?

They draw customers in by advertising lower rates - say, 3.75%, or just 3.25% above the academic rate set by the Bank of Britain - but you need to put down half the cost of the house to qualify for that. The less deposit you have, the greater the interest rate.

When contemplating banks, our knickers become so twisted most of us can barely breathe. So let's try and be fair to them. Perhaps they have to charge higher rates to make the loan worth their while over time. Does that make sense to you? Nope, me neither.

Out of my depth I may be, but I still insist on splashing about. Many of us still tend to see banks through rose-tinted goggles as legitimate institutions. But this is a hangover from the old days of decent service and Mainwaring-style managers. No longer. They are robbers, crooks and charlatans.

And here's the rub: they don't even pay their front-line staff that well. Whatever you do, don't go marching down with your pitchfork to your local bank and start threatening the poor schmuck on the counter with it. Ain't anything to do with them.

That said, I do want to track down who did what to earn a £50 handling fee recently robbed from my account. I didn't authorise this. Who got what for doing what, and what was the hourly rate? What?

If someone took £50 out of your wallet, you'd poke them in the snoot. So, how come the banksters just arbitrarily remove £50 for shuffling paper about? It's a load of bull and, boy, it really gets my goat.

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