True Cost of Debt

To enable us to properly prepare for you a true Cost of Debt comparison, we will require certain specific information. Please contact us with your initial enquiry and we shall call you to obtain the required information. We will then email to you the specifically tailored model within 24-48 hours. ……you may be quite surprised by the result !

Each year, Australian banks report record profit after record profit, attributable largely to Fee Income.

A bank must first borrow money from the Financial Markets before it can on-lend it to its customers. The price (or interest rate, at which a bank borrows its money) paid by a bank is typically called the SWAP Rate.

A bid-ask spread is added to the SWAP rate to achieve BBSY-bid. A bank Treasury Margin of up to 0.50% is then added before adding the bank’s Line Fee, Account Fee, Service Fee, etc. Bill Roll-Over Fees are also charged each month or quarter, as the case may be. It is these and other the Fees which generate record profits for the banks.

Different banks use different:

• Terminology, or different names for the different types of margins, fees, and charges they impose
• Treasury Margins (we have seen them as high as 0.65%)
• Fees and charges,  the variety of which can be mind boggling
• Bill maturities  (some are 30 day, others may be 60, 90, 120, or even 180 day) and this will have a significant affect on the True Cost of Debt comparison

Make an enquiry