Let Them Eat Cake!

Well the world is SURE different that it was just a few weeks ago. The Covid-19 Pandemic is causing havoc all around the world. People are scared. Businesses are at risk. The livelihood we all have known may even be at risk.

The governement and banks are trying to step up, but some of what they are proposing is bullshit!

I've received MANY emails from various banks saying "they are here to help". But their offers aren't help at all. Their offers are cleverly disguised as help, but has the potential to make them BILLIONS more (on top of the BILLIONS they already make).

Here's how....

Banks are offering 'deferals' on your mortage. 'Take a break. Pay later.' But that comes with a price. So before you defer your mortgage payment for your own home or your rental consider this.

I did some math to see just how 'hurting' the banks will be if we deferred a mortgage payment. Now, I used 'easy' numbers to calculate this so they may not match your payments or interest. But hear me out...

Let's say your monthly mortgage payment is $1000 a month. Also let's pretend your interest is at 3%.

If you defer ONE payment the cost for that over the course of a year is $30.00.

Now let's say you have 4 years left in your mortgage. The cost of the deferal grows.

Year 1 costs $30.00. Total cost $30.00

Year 2 costs $30.00, plus $0.90 for the interest in last year's $30.00 cost, plus last year's $30.00. Now the total cost is $60.90.

Year 3 costs $30.00, plus $1.83 for the interest on year one and year two's cost, plus the cost of year one and year two. Total cost now $30+$1.83+$60.90 = $92.73.

Now... Last year if your mortgage...

Cost for the deferal again $30.00, plus the internet on last year's total $2.78, plus the cost of the previous 3 years. Total cost: $30+$2.78+$92.73 = $125.51. Which is 12.5% of what you deferred.

$125.51 for a ONE MONTH deferal for ONE HOUSEHOLD.

Now, there are 12.4 million households in Canada. And of those 8.5 million own their own home.

If ONLY HALF these home owners (4.25M) defered one month and all had 4 years left.... The bank would make... $1,066,850,385.00. That's just over a BILLION in 4 years for only a ONE MONTH deferal. This is money they are making ON TOP of what we already are paying to borrow.

Thanks big banks for helping out at a time we need you most. Glad to see you have our best interests in mind. It wouldn't cost them to let those who need it skip a month or two WITHOUT penalty. But nah... This 'deal' is a billion dollar money maker.... And it only requires half of us to only take one month... And the more who do or the more who take more than one month... The money grows even more. #ShameShame

We need to let these banks know this isn't good enough. Some people are at risk of losing everything. Our retirement funds are in the toilet right now. But they offer a solution that not only costs us more in the long run, it pads their pockets.

"Let them eat cake" is what our banks are telling us.... Well, we need to let them know we are on to them and we don't want the cake they are offering.