Home loan haggling experiment – snag a 1.45% discount

Home loan haggling experiment – snag a 1.45% discount

I’ve been on the phone again for Mozo’s mortgage mystery shop, anonymously haggling with the Big banks to see what kind of deal I can get and 2016 is shaping up to be a good year for negotiating a home loan discount.

When I did this last year, none of the Big 4 would come to the party with additional discounts for investor loans. That was mostly thanks to new APRA regulations at the time, which meant banks were shaving their investor loan books down to below 10% growth per year.

This year was an entirely different story, and in fact, the best discount offered – a whopping 1.45% – was for investors. So if you’re looking for an investment property, now might be a good time to haggle for a great deal on a mortgage.

First homebuyers and refinancers can also hook some solid savings if they’re willing to ask for them and negotiate for what they want. Take a look at the discounts I was able to secure from each of the big 4 banks with a little haggling.

Mozo home loan mystery shop discounts 2016

ANZ

Borrower Standard Variable Rate Mystery Shop Rate Total Discount
First Homebuyer 5.25% 4.05% 1.20%
Refinancer 5.25% 3.95% 1.30%
Investor 5.52% 4.07% 1.45%

CommBank

Borrower Standard Variable Rate Mystery Shop Rate Total Discount
First Homebuyer 5.22% 4.02% 1.20%
Refinancer 5.22% 4.02% 1.20%
Investor 5.49% 4.40% 1.09%

NAB

Borrower Standard Variable Rate Mystery Shop Rate Total Discount
First Homebuyer 5.25% 4.10% 1.15%
Refinancer 5.25% 4.02% 1.23%
Investor 5.40% 4.07% 1.33%

Westpac

Borrower Standard Variable Rate Mystery Shop Rate Total Discount
First Homebuyer 5.29% 4.34% 0.95%
Refinancer 5.29% 4.31% 0.98%
Investor 5.56% 4.25% 1.21%

Although I was able to score some great discounts, the truth is, haggling isn’t for everyone. There’s more to it than picking up the phone and asking, so here are four things you should do before you even speak to a bank, to put yourself in the best position for negotiating a good deal.

  1. Research the competition. The worst mistake is going into a negotiation blind. Before you start asking for discounts on a home loan rate, know what’s on offer from other providers – often smaller lenders will offer lower rates than the big 4. If you can tell your chosen lender you got a better quote somewhere else, they’ll be more likely to match it.
  2. Know what you’re aiming for. A low rate is not the only important thing in a home loan – you might also be after features like an offset account or redraw facility. If you can’t get a discount on your interest rate, you might be able to bargain for waived fees on things like this, so know what’s important for your home loan so you can be flexible about the deal on offer.
  3. Think about what you can bring to the table. You can score some great discounts by bundling other banking products with your home loan. Not only can you bring things like credit cards, life insurance or home insurance across with you, but consider whether you have friends or family with a home loan that you can also bring to a lender. That way, you represent a bigger lending amount, and will be able to snag a bigger discount.
  4. Be ready to walk away. A lender might ask you to fill in an application before they offer any kind of discount – but don’t get sucked into that trap. As soon as you apply, a credit inquiry is put on your record, so you really want to be sure of the deal you’re getting first. Make sure they commit to a discount before you commit to an application. If they won’t, you can tell them that you don’t want an inquiry to go on your credit history, and that you’re happy to take your business elsewhere if they can’t offer a discount before you apply.

If you’re not so confident in your own haggling skills, I can help by negotiating a better deal with the big banks on your behalf. Give me a call on 13 6696 (MOZO) or fill in your details below and I’ll get back to you. What have you got to lose?

Home loan haggling experiment – snag a 1.45% discount was last modified: October 26, 2016 by Steve Jovcevski

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