With official interest rates trending downward, shrewd mortgage holders may take the opportunity to call their lender to ask for a better deal.
But when even a small interest rate reduction means potential savings of thousands of dollars, is a simple phone call really enough to get you there?
In 2019, ‘your interest rate should have a three in front of it’, is common advice for home owners considering the competitiveness of their loan settings. Indeed with the RBA’s recent reduction in the official cash rate – interest rates with a two in front of it may also now be possible
But while a number of lenders offer lower rates to new customers, it’s not always so simple for existing customers to secure the same outcome.
If you want a better interest there are a couple of options:
- Call your bank and ask them to match the new rate or rate offered by a competitor. ; OR
- Contact your Mortgage Broker and get them to assist with reviewing and negotiating your interest rate.
And although the first option is commonly recommended, lenders aren’t always so obliging when it comes to rate-matching to get you a more affordable mortgage. It can also take some research of offers available in the market and whether different offers are comparable.
As an existing client, it can be disheartening to see your bank offer new customers a lower rate to the one you currently have.
Lenders regularly try to ‘win’ new customers by offering low rates. It is a great acquisition strategy. But if they refuse to match your current rate to this new offer, you can always contact a Mortgage Broker and refinance with a lender who is hungry to win your business.”
Mortgage brokers have access to a broad range of lenders on their lending panel and this creates competition amongst lenders. Mortgage brokers are also in a position to offer you a more in-depth and customised level of service. This can allow them to focus on finding their customers a mortgage product that may suit their current needs, wants and circumstances.