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Trick no. 1 : Mortgage loan selling procedure

When in the year 2009 we signed the contract for chf denominated mortgage loan with Deutsche Bank, we experienced a highly manipulative procedure. The bank representative:

  • presented how the exchange rates would affect the value of the installment but only in case of 20% increase and conovinced us that a higher increase was very unlikely ;
  • refused to provide us with a contract draft, explaining that the contract would be prepared after submitting an application for the loan ;
  • told us that the application for the loan had to be submitted to the bank with some additional documents - one of them was *the preliminary contract of real estate purchase* ; but, in order to conclude a preliminary contract of purchase, we had to pay in advance a significant amount of money to the seller as a guaranty of future conclusion of transaction (so we would have lost the money in case we had backed out).

  • After conclusion of the preliminary purchase contract and after putting in the application with all the necessary documents, we waited for the bank to prepare the contract of the loan. It lasted four or five weeks. Eventually, when we got the information that the contract was ready to be signed, we went to the bank to conclude the contract. We were shocked by the volume of the contract. We had not been prepared for this. We suggested that we should take the contract home to get familiar with the document. It was a really big document. But the bank representative said there was no option for us to take the document home for study. So .. we signed the documents. We put our trust in the bank representantive and in the bank itself. We also believed that the bank knows what they were doing by selling a chf denominated loan to a couple who get income in the local currency (polish zloty).

    We were not thoroghly informed about the true nature of the contract. It is not just the effect of exchange rate changes on the value of the monthly installment. About this we were informed to some extent but we also got convinced by the bank representative that it is highly improbable that the exchange rate would change by more than 20 %. So we accepted this risk.

    According to the contract, both financing and the repayment of the loan was only possible in polish zloty, even though both the loan balance and the monthly installment were quoted in CHF. Deutsche Bank used their tables of exchange rates for conversion from CHF to PLN both during loan financing and loan repayment. The exchange rates were high as compared to rates offered by, for example, online exchange services.

    The things we were not informed about were:
  • that the spreads might change significantly whenever bank likes
  • that the spreads have a very large effect on the whole cost of the loan
  • the strict procedures of currency conversion from chf to pln
  • the bank's loan policies

  • So we were totally misinformed and we are victims of misselling of a financial product.


    Contents / Spis tresci

    Trick no. 1 : Mortgage loan selling procedure
    Trick no. 2 : The spreads
    Trick no. 3 : Contract repairment
    Trick no. 4 : Convertion of loan currency
    Trick no. 5 : Conversion of variable interest rate to fixed interest rate
    Problem no. 1: What should be done
    Problem no. 2: A very important question to finance specialists in poland
    Problem no. 3: Inconsistency of Deutsche Bank procedures of foreign currency loans handling
    Problem no. 4: Calculations before granting a CHF denominated loan
    [2021-07-14] One more inquiry about the balance clause in the annex
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    Not available in english yet
    Not available in english yet

    (c) 2020 by a Deutsche Bank client