How to REALLY negotiate with the banks on your home loan

As RBA cuts interest rates to a new low of 1.75%, are you getting the benefits in your home loan?

Friday, June 24, 2016 Last Updated on 24 June 2016

article-banner

If you have been with the same home loan for over 3 years, it is high time to do a health checkup on your loan – are you still satisfied with it?

Call your lender – In case you are not satisfied with the current rate or plan to cash in on equity to buy another investment property, call up your lender and ask what best rates they can offer you.

Once you are armed with what competitors are offering and if new applicants in your bank are getting a better deal, it is easier to negotiate and more often than not, your bank will offer you something better – as it is easier to retain old customers than find new ones.

Especially if you have never defaulted on your repayments and possess an untarnished credit file, there is no reason your lender should not pass on some benefit of the latest cuts to you.

Use our repayment calculator to see how much difference even a 0.5% reduction in your home loan rate can make.

Bundle Up – Another strategy can be to ask for a bundled product by rolling in your credit card and personal loan with your home loan. Lenders love bundled products and may even forego the fee for you.

Ongoing Fee – It is also a good idea to negotiate the ongoing fee on your loan – even though a small amount, it adds up big time over the life of the loan.

Refinance – In case you are not satisfied with your current loan, scan the market for better rates and refinance for more competitive rates. But do bear in mind the exit cost and other fee before taking the jump. Refinancing can be a good strategy to reduce repayments, if done smartly.

Get in touch with a mortgage broker – There are cases when a lender may simply refuse to reduce the rate – either because they don’t consider you a worthy borrower or they have already offered you the best.

The solution to the first scenario lies in pulling out your credit file and looking out for any black spots. A mortgage broker can help you get loan in cases of low credit history or bad debt.

The second scenario has more to do with choice and satisfaction.

A particular lender has only a limited number of products it can offer you. Secondly, customer satisfaction rates, especially for the big 4, have been really low in recent times, showing that big banks are not really rewarding their customers for their loyalty.

In fact, you may be willing to pay a higher price to remain with your bank, but the property market is all about being competitive, and savvy investors are always looking out for more choice and better deals.

A mortgage broker can get you REALLY low interest rates on your home loan.

Lenders predict that more than 60% loan applications will be through mortgage brokers in the future; unsurprisingly attributable to the lower interest rates and much wider choice that mortgage brokers offer to their customers. Add to that the convenience of meeting at your choice of time coupled with years of experience brokers amass over time, most customers report high satisfaction rates and are likely to recommend their broker to family and friends.

Brokers deal with many lenders at a time and get low rates from banks, as they do most of the pre-application work for the bank. To get a REALLY good deal – scan the market for best deals by simply comparing home loans online. You could choose a regular comparison site comparing lender advertised rates or HashChing to compare already low rates pre-negotiated by mortgage brokers.

The key to lowest rates in the mortgage industry lies with mortgage brokers, and HashChing leverages this fact by bringing together hundreds of verified licensed brokers on one single platform for users to choose from.

HashChing platform lets you compare broker negotiated deals, and once a user chooses a deal, details of the concerned broker (photo and contact) are forwarded to the user. Users can expect the broker to call them within 12 hours of submitting their documents online. Here’s what makes HashChing different from other comparison sites:

  • Most competitive rates from several verified brokers on one platform.
  • On-demand service for users – connect instantly with brokers.
  • No fee charged from users.
  • User queries addressed from experts online, free of cost.
  • Reviews and ratings from real users for brokers on the platform.

So are you happy with your home loan? If not, compare home loan deals or speak to an expert to know about the best deals in the market.

How much do you want to borrow?

$150,000

$1,325,000

$2,500,000