Just a heads up to the commercial property borrowers out there……we have just received a bunch of ANZ loan documents on a 2/3 loan to value ratio tenanted commercial property where the penalty rate on late payment is between:
TWENTY SIX TO TWENTY SEVEN PERCENT per annum.
Specifically, it is set at 15% above their commercial overdraft rate. And no, it’s not a typo, if their contact has it right. “They” maintain that this is now their “standard” margin.
To be fair, the person we spoke to seemed fairly clueless…for example in discussion on other matters they had no idea you could simply transfer a loan facility from a vendor to a related purchaser with a deed of novation; could not even grasp the concept. They were generally an embarassing ambassador for the bank and might have had it completely wrong, as they did when arguing the penalty rate was just for “excess” amounts, which it clearly is not. So we are continuing to work our way up the bank chain.
We have never seen a penalty rate that high on a main bank first mortgage loan.
The ANZ, of course, are quite free to charge what they like. People wanting commercial property loans are equally free to choose to look elsewhere and would be well advised to think long and hard about it.