Call Your Bank And Get A Better Rate On Your Home Loan

Post by Sharat on July 7, 2018 · Under loans · Comments Off on Call Your Bank And Get A Better Rate On Your Home Loan 

It may be a little awkward to have the talk but what you will find that your tears could well end up being one’s of joy instead of sadness. 7 out of 10 Australian mortgage borrowers who negotiate with their lenders over interest rates are likely to be successful in bringing the rate down. Whilst that does sound encouraging, the bad news is not enough Australians are calling their banks to seek a better deal despite the fact that it will save them huge amounts of cash.

Save a boat load of cash

Experts says that two-thirds of home loan borrowers have not negotiated with their lenders over the last two years which means there is a huge population of borrowers who could save a boat load of cash by simply picking up the phone. According to a poll of 1,500 homeowners, 70 per cent of those that successfully sought better deals saw their interest rate cut by an average of 0.50%. The results offer hope to people who believe it is too intimidating or difficult to negotiate a better deal.

How much could you save?

Before you contact your lender, you should calculate exactly what is at stake. For example, an owner occupier making both interest and principal repayments on a $350,000 home loan with an average variable interest rate of 4.35 per cent would pay $277,243 in interest alone over 30 years. If you were to call your lender and negotiate a .50% rate cut your interest bill would be $240,698 over thirty years, saving you $1,200 every year. To put that into context, a single phone call could end up saving you $36,000.

Call NOW!

It’s always a good time to negotiate a better deal with your lender and given that interest rates are starting to tighten it is important to do it sooner rather than later. Variable rates are moving upwards instead of downwards for the first time in over a year indicating that rate hikes are imminent. Despite the fact that the Australian central bank has held rates unchanged, most banks tap international debt markets for funding where costs have begun to rise. As that happens it is inevitable that lenders try to maintain net interest margins by hiking interest rates.

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