Here is how!
Interest rates are low these days. When the RBA reduces interest rates, most of the time the banks send out letters to their clients that they are reducing the interest rates on your mortgage. In most cases they don’t pass the rate cut on in full. They give you something to keep you happy and so you won’t ask for more.
What I want you to do before the year ends is to review your interest rates and speak to your bank to get a better rate. Just because they have passed on some of the rate cut does not mean that you can’t get more. If they can give away something without you asking, then they can give you more.
- Do your research
Research what the competitors are offering. Use comparison websites and then call the bank to make sure that you would be eligible for this rate.
- Find out what the rate for new customers is
Banks often offer great promotions to lure in new clients which existing clients don’t get. Then ask the bank to apply that promotion to your home loan.
- Set yourself a target rate
Set yourself a target rate that you want to get. Start a bit more ambitiously as they most probably won’t go to your target rate, but they will offer something closer to that.
- Make your threats reality
If you say that you will move to another lender because they were not willing to offer you a better rate, make sure you go through with that. If you don’t then you lose credibility and all your bargaining power with that bank. While it is hard work to apply for a loan with a new bank look at it as work that you get paid for in saved interest.
Now its your turn! Do you know what interest you are currently paying on your home loan? If you can’t answer this question right now, then check it out and start negotiating. Make it a priority that you will have completed by the end of the year!