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Are you over paying on your home loan?
Rates have been cut by a large number of lenders, following the RBA’s February decision to lower the cash rate.
This means now is a great time to review your home loan and see if you can get a better deal. And the good news is, yes, you can ask your lender to lower your rate. Here’s how:
Why Should You Ask Your Lender for a Lower Rate?
By asking your lender for a lower rate, you could potentially save thousands of dollars over the life of your mortgage. This extra money could be put towards other expenses or invested in growing your wealth.
But even if the RBA has cut rates, it doesn’t necessarily mean that your lender has passed on those savings to you. In fact, there have been instances where lenders have kept rates the same. This is why it’s important to regularly review your home loan and negotiate for a better rate.
A rate review allows you or your mortgage broker to assess whether your current rate remains competitive compared to what’s available in the market. It’s a chance to highlight your loyalty as a customer or leverage a strong repayment history when negotiating a lower rate. If your lender isn’t willing to offer a better deal, you may also discover opportunities to refinance with a new lender offering more favourable terms. Ultimately, a rate review can help ensure your loan is tailored to your best financial interests.
Why Now Is the Perfect Time to Negotiate
The Impact of the RBA Rate Cuts
The RBA’s recent decision to lower its cash rate has created ripples across the lending market. Typically, when the cash rate drops, lenders reduce their interest rates, but those reductions don’t always automatically filter down to existing home loan customers. This creates an opportunity to negotiate a better deal for yourself.
Increased Competition Among Lenders
Australia’s lending market is more competitive than ever. Borrowers are leveraging comparison tools, mortgage brokers, and refinancing options to switch to lenders offering better deals. For banks and lenders, this competitive landscape means one thing: they need to fight harder to retain their customers
Borrower Leverage Is Better Than Ever
Customer retention is a top priority for lenders in today’s climate, and as a borrower, you can use that to your advantage. If your lender values your loyalty but knows you’re eyeing competitive rates elsewhere, they’re much more likely to offer a better deal to keep you onboard.
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Important information
These calculations do not take into account any fees and charges. The results provided by these calculators are an approximate guide only. These calculators, or the results generated, do not constitute any agreement by us to provide credit assistance. Applications are subject to normal lending guidelines.
WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate
Steps to Negotiate a Better Rate with Your Lender
Step 1: Research and Compare
Start by gathering data. Explore what competitors are offering, and calculate your potential savings if your rate were reduced. Use online calculators to estimate how much you could save on repayments. The more informed you are, the stronger your case.
Step 2: Contact Your Lender
When calling your lender:
- Be Confident: Explain that you’ve done your research and found better rates elsewhere.
- Ask the Right Questions: Say, “I’ve noticed my rate isn’t as competitive as other lenders. Can you offer me a better deal?”
Step 3: Present Your Case
Highlight:
- Your loyalty as a long-time customer.
- Your strong repayment record.
- Specific competitor offers you’ve found.
Lenders do not want to lose reliable borrowers, so demonstrating your reliability is key.
Step 4: Be Willing to Walk Away
If your lender isn’t willing to negotiate, refinancing might be your next best option. Contact a mortgage broker to explore refinancing deals offering lower rates, better terms, or additional perks.
Why Using a Mortgage Broker is a Smart Choice
Navigating the complex world of home loans and rate negotiations can feel overwhelming, but the good news is you don’t have to tackle it alone. By enlisting the help of a reputable mortgage broker, you can save not only money but also valuable time and effort. Mortgage brokers are skilled professionals who understand the lending market inside and out. They can compare multiple lenders, identify the most competitive rates, and negotiate directly on your behalf—all while ensuring the process is stress-free for you.
Additionally, brokers have access to industry technology as well as established relationships with a wide network of lenders, which means they often have access to exclusive deals or information that aren’t available to individual borrowers.
Importantly, they act in your best interests, providing expert advice tailored to your financial circumstances and goals. Whether it’s securing a more favourable rate or taking on the workload of negotiating, a mortgage broker can ensure you achieve the best possible outcome with minimal hassle.
