You shouldn’t have brought up banking mate – I can argue untill the cows come home there …
:popcorn:
Your calculations are superficial …
A 9% mortgage on $150,000 might generate $300,000 over 30 years – but the banks profit from that is far, far less.
Firstly the bank will probably be paying depositors anywhere between 6% to 7.5% for those funds – giving them a profit of say 200 basis points (2%) and that’s hugely generous.
Throw in running costs and documentation costs (staff, storage, monthly accounts and suchlike) and the real value to the bank is only about $1500 to $2000 per year.
So your $500 fee is a 25% to 33% return on first years profits. Which is not a bad commision rate.
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So the example was a poor one.