How to renegotiate your home loan?

Posted on Monday, October 15, 2018 - 14:02

Doing a comparison check on your home loan can help you find out whether you are forking out more than you should when it comes to your home loan. If you are, then it’s time to renegotiate your home loan rate. Here are five handy tips to boost your confidence when it comes to negotiating your way to a better rate.

Avoid setting and forgetting

One way that some Aussies shortchange themselves when it comes to their home loans is when they choose to set and forget their mortgage. Finding a home loan that comes with a rate that is even 1% lower than your current mortgage can shave off thousands of dollars. 50% of Australians tend to negotiate their home loan once every 2 – 5 years which can help them access a better rate that saves them money. The set and forget approach can impact how you end up paying for your home loan.

Research other rates

When it comes to negotiating a better rate Aussies can be on the shy side. KPMG found that 52% of men were likely to negotiate their rate while 48% of women would consider it. One way to wield the power of negotiating your way to a better rate is knowing what is offered by your lenders' competitors. To make the researching process easier you can look at comparison sites or speak to other lenders to see what they are offering. When comparing keep in mind to compare apples to apples. Researching can help you find the best rate and increase your negotiation power.

Be ballsy about asking

One of the ways that you can navigate your way to a better rate is if you ask. Speaking to a broker can give you access to a range of information ranging from various lenders that can suit you and have rates that match your finances. Brokers know the industry and will be able to tell you which lender is offering the best rate, which means less effort on your end. They can also give you access to loans and rates that are not publicly advertised to help you save even further.

Approaching your lender

With enough information in the bag in terms of better rates and loan features, you can now be more confident when approaching your lender to ask them about what kind of rates they are offering new customers. If your lender is currently offering some low rate loans to new customers you can ask them if you can get the same low rate. If your lender refuses you can ask why and show them that you will be able to get a better rate elsewhere. If they still refuse to lower your rate then you can go to another lender, but keep in mind the possible break fees that come with it.

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