What is interest rate gouging ?

Interest rate gouging is similar to charging full price for a can of beans that should have 400grams of content but on inspection has only 360 grams. 

Every can of interest includes a charge called loan impairment  that the bank receives from home buyers to recover losses should anyone not be able to repay their home loan. Loan impairment  is recorded in the banks accounts and is assessed having regard to losses realized, the risk of changing economic circumstances and forward budgeting. The Government guarantee of 15%  means that the loan impairment charges included in the interest charged to the home buyer will not be required as the Government will refund the bank for losses incurred and like the beans removes the charge from the can of interest.

The chart attached " The Greedy Banker" sets out what happens to interest rates when loan impairment is removed .
Perhaps the reader whose loan is protected by LMI insurance or the Government guarantee should check in with their bank in case the bank forgot to remove the LOAN IMPAIRMENT  charge from the can ? 
Perhaps the ACCC would like to comment they have experience in the matter of price  gouging !

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