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 with a principle plus interest owner occupied loan.
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.
A leading mortgage and finance broker says that if people want a better deal on their mortgage, there are basically three options:
1. Call your bank and ask them to match the new rate, or
2. Call your broker and ask them to negotiate a new rate with your existing bank on your behalf, or
3. Ask your broker to assess your options with other lenders and vote with your feet.
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.
“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 broker and refinance with a lender who is hungry to win your business.”
Mortgage brokers, on average, have access to a panel of 34 lenders 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 find their customers a mortgage product that may suit their current needs, wants and circumstances.
Contact us now if your would like us to assist with your home loan review!