Banks 'willing to cut rates' for clever home loan shoppers

Monday 01 November 2010

Article by Mozo

Borrowers can secure better mortgage deals by choosing to compare home loans and pressuring banks with rival offers, one experiment has suggested.

A test by the Herald Sun has found that Aussie homeowners could save up to $10,000 in interest repayments if they barter with the banks.

The newspaper approached the "big four" banks with the aim of securing the best deal on a $400,000 loan. The test was carried out to give borrowers some savings strategies amid fears of rising interest rates from tomorrow (November 2nd) following the Reserve Bank monetary policy meeting.

It found that all the banks were willing to cut rates beyond the advertised variable figure, with NAB offering the cheapest deal by cutting its Choice Package from 6.54 per cent to 6.49 per cent.

"The incentive came after the Herald Sun revealed inquiries with non-bank rivals," said the paper.

"Westpac pledged the biggest cut, shaving 0.1 per cent off its Premier Advantage Package. The deal, dependent on consolidating other banking, would save almost $10,000 in interest over the loan's life."

It was also reported that ANZ dropped its already discounted variable rate from 6.71 to 6.66 per cent "with relative ease" while Commonwealth Bank offered an extra 0.05 per cent rate discount and waived a $350 annual fee in the loan's first year.

This article is brought to you by Mozo – Helping you compare home loans
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