Michael Pascoe writes:

Former newsreader Indira Naidoo is off to
an odd start as the Australian Consumers’ Association flak by giving GE Money’s
dubious 40-year mortgage product a qualified tick in the weekend press.

While Treasurer Cossie was warning punters
to be wary of such loans, Fairfax was reporting: “Australian
Consumers’ Association spokeswoman Indira Naidoo said the new loans were a
welcome alternative, provided borrowers were fully informed and aware that
hefty exit fees might apply if they wanted to end the contract early.”

Given tendencies
to up-grade housing, move or just re-finance for a better deal, the average
Australian mortgage only lasted about eight years last time I looked, making a
40-year loan with a hefty payout penalty less than ideal for the vast majority
of consumers.

The claimed
benefit of the 40-year mortgage is that it reduces the minimum monthly
repayments – but anyone so desperate as to need that reduction is probably in
trouble anyway and will hit strife dealing with the RBA’s whims.

And there’s the crucial little bottom-line
matter of what interest rate GE Money charges. If there’s an indication of what
it might be on the GE Money web site, I can’t find out – which naturally makes
one a little suspicious.

It’s quite a
change though to find the ACA in the GE Money corner – you’d more often expect
them to turn up as an advisor for the prosecution in tabloid television stories
about loans going bad.