How to Negotiate a Better Rate on Your Home Loan

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Over the past few years, many homeowners and investors have been paying low rates on their investments and home loans. With rates continuing to fall, you’re going to want to be negotiating with your bank to get the best rates possible. 

There are a few people that might not be happy with the rates they agreed to a few years ago, or have been paying well above average for some time, and we’re here to help. It’s not impossible to negotiate a better home loan rate, and with rates where they are, it’s certainly worth your time to fight for a lower one. 

You could save thousands on your home loan with just half a percentage point drop on your interest rate, and those savings could go into renovations, or even making repayments a lot easier. 

With that out of the way, let’s take a look below at how to negotiate a better rate on your home loan. 

Enquire About New Customer Rates

The first step on your rate negation to-do list is calling your bank and asking about new customer home loan rates. Take a look at your current lender and check your accounts for any unnecessary fees and of course the rate. There’s a good chance your bank is running a promotion or offers long-term perks for new customers, which are often rock-bottom rates. 

If you’ve noticed that there are ultra-low rates for new customers, then ask why you’re not able to make use of these. You are a long-term and loyal customer, after all.

In most cases, you’ll find your bank will offer you a new rate on the spot if you ask them for one, though if they don’t, float the prospect of leaving for a new bank and you’ll soon have access to a new rate or at least a reduction.

Research, Then Ask for Personal Rates

A second way to scout for a super low home loan rate is to do your research, and bring up what you’ve found in a call with a broker. Of course, you’ll see several advertised rates on television, though go beyond the TV! It’s a good idea to dig deep into lender websites. 

There are a number of somewhat unadvertised rates that you’ll need to find on your own, which you can repeat in your call with a broker. 

For those looking to get the most out of the journey to a lower rate, give a lender a call and ask for a custom or personal rate that would be offered to you if you refinanced with them. In most cases, you’ll be offered some incredibly low rates which could save you a ton in the long term. 

Always Play Hardball

We suggest you float the prospect of moving lenders whenever you can and make good on these claims. If your broker or customer retention representative isn’t flexing at all, or only offering minuscule rate movements, then change lenders. 

If you have spotted a better rate elsewhere or have been offered a far better personal rate in writing, then make your move. Albeit a hassle, moving lenders could save you thousands of dollars in interest and leave you better off; it’s a little hard work for long-term gains. 

Call a Standalone Broker

Those with a hefty mortgage, though not enough time to dig through hundreds of websites, this is where calling a broker comes in handy. They’ll be able to do all of the hard work for you, and they’ll know where to look for the best rates possible. In the end, you’ll be supplied with some of the best rate prices on the market, and you’ll only need to take your pick! 

Keep in mind that brokers are often the go-to guys for off-the-market rates and loans. That said, they’re your best bet at getting those impossible to find super low rates. 

Never Forget to Check The Market

Once you finally negotiate an optimal new home loan rate, you must continue keeping an eye on the market every 12 months or so. The big banks rely on Aussie’s somewhat predictable ‘set and forget’ attitude to finances, which means there’s little chance you’ll be notified of a better deal when one crops up. 

Our biggest tip is to set a reminder in your calendar app that notifies you every year to check for the latest home loan rates. Throughout a year, rates could have fallen further, or your circumstances may have changed; you might want to renovate or go on a holiday, which you’ll need some extra cash for, so always be on top of money-saving rate changes. 

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