Have you always been too nervous to ask your home loan lender for a lower rate? Well, what if we told you it could save you over $1,200 a year? Recent Mozo research revealed that 7 out of 10 Aussies were able to haggle their way to a lower home loan rate, knocking off an average 0.5%.
And while you may think that a meer difference of 50 basis points won’t make a huge impact towards your mortgage, over the course of a 30-year loan, it could save you $36,000! So if you’re now thinking it's time you had a chat with your home loan lender, we’ve got five tips on how to turn yourself into a haggling pro.
First things first, to be an expert haggler, you’ll need to have proof that you could be on a better deal. Shop around and compare rates from other providers and quote these to your lender when you negotiate. The best case scenario? The lender will match the competitor’s rate to prevent you from walking away.
Resist the initial temptation
Once you start negotiating, your lender may come back with a tempting discount. But before you jump for joy and agree to your newly slashed rate, dig deeper by asking for more. Why? Because chances are, it’s not the best they can do, so if you’re willing to push harder you may be rewarded with an even bigger discount.
Be savvy by bringing some of your other financial products to the table, like your credit card or insurance policy. By bundling your products, your lender may see this as an offer they can’t refuse and in return, you guessed it, will offer you an even bigger discount on your home loan.
But don't just stop there
With that being said, your interest rate is not the only thing you can haggle on. Extras like cash back or frequent flyer points are also up for negotiation. But again, you’ll need to come prepared.
And remember, cheapest isn't always best
While everyone wants to have the cheapest rate on the market, having the lowest rate might see you miss out on other nifty home loan features, like an offset account. Having these features on your side could help you cut down on the amount of interest you pay, saving you big time in the long run.
Now that you’ve turned pro, you’ll need to start comparing the latest home loan deals and what better place to start than our home loan comparison tool, which currently compares over 500 home loans from more than 80 lenders.