Home loan haggling experiment: Big 4 banks offer best discounts to investors
Each year, financial comparison site Mozo goes undercover to see how much a first home buyer, a refinancer and an investor can haggle down the home loan rates on offer from Australia’s Big 4 banks - and what a difference a year can make.
In our 2015 mystery shop, Mozo’s property expert Steve Jovcevski received no additional discount offers when he haggled as an investor. This year, in a reversal of last years results, investors were offered the biggest discounts.
“Last year, investors were hard strapped to snag any additional discounts because the banks were under pressure to scale back their investor loan books in line with APRA requirements,” Jovcevski explained.
“But this time around, three out of four big banks reserved their largest discount for investors which suggests that they are now open to negotiate on investor rates again,” said Jovcevski.
Mozo home loan mystery shop discounts 2016
| Bank | Borrower | Standard Variable Rate | Mystery Shop Rate | Total Discount |
|---|---|---|---|---|
| ANZ | First Homebuyer | 5.25% | 4.05% | 1.20% |
| Refinancer | 5.25% | 3.95% | 1.30% | |
| Investor | 5.52% | 4.07% | 1.45% | |
| CommBank | First Homebuyer | 5.22% | 4.02% | 1.20% |
| Refinancer | 5.22% | 4.02% | 1.20% | |
| Investor | 5.49% | 4.40% | 1.09% | |
| NAB | First Homebuyer | 5.25% | 4.10% | 1.15% |
| Refinancer | 5.25% | 4.02% | 1.23% | |
| Investor | 5.40% | 4.07% | 1.33% | |
| Westpac | First Homebuyer | 5.29% | 4.34% | 0.95% |
| Refinancer | 5.29% | 4.31% | 0.98% | |
| Investor | 5.56% | 4.25% | 1.21% |
For instance, while ANZ offered a discount of 1.20% to first home buyers, as an investor, Jovcevski was able to secure a discount of 1.45%.
On top of bagging low rates, Jovcevski said borrowers needed to think outside the box when haggling.
“ANZ and NAB offered other generous perks including cash back, a waived package fee for the first year and even frequent flyer points,” he said. “Which serves as a reminder to hagglers not just to negotiate on rates.”
Mozo’s top home loan haggling tips:- See what competitors are offering: Before you start haggling, shop around for the best rates on the market. If you come armed with a great quote from a competitor, big banks are likely to price match it.
- Don’t jump at the first offer: The first discount you’re offered is often not the best your bank can do - the best offers are sometimes reserved for customers willing to push for it. So dig in your heels and ask if they can do better for you.
- Look for other useful extras: While the interest rate is important, don’t forget that there are other perks you could snag, like cash back, waived fees or useful features.
- Bring your other banking products with you: If you’re prepared to bring some of your other financial products, like credit cards, personal loans or savings accounts over to the same bank, you may be able to negotiate a larger discount.
- Compare on equal footing: Not all home loans are equal - signing up for the lowest rate might seem like a good idea, but check if that mortgage comes with other features you may like to use, such as an offset account, redraw facility or the option of interest only repayments.
Need a little help? If you aren’t sure how to start haggling a great deal on your home loan, Mozo can help you out. Just give Steve Jovcevski a call on 13 66 96 (MOZO).
* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.
** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.
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