Is one phone call really all it takes to secure a lower interest rate?
Published by MFAA
With official interest rates trending downward, shrewd mortgage holders may take the opportunity to call their lender to ask for a better deal.
But when even a small interest rate reduction means potential savings of thousands of dollars, is a simple phone call really enough to get you there?
In 2019, ‘your interest rate should have a three in front of it’, is common advice for home owners considering the competitiveness of their loan settings.
But while a number of lenders offer lower rates to new customers, it’s not always so simple for existing customers to secure the same outcome.
A leading mortgage and finance broker says that if people want a better deal on their mortgage, there are basically two options:
- Call your bank and ask them to match the new rate, or
- Contact your broker and vote with your feet.
And although the first option is commonly recommended, lenders aren’t always so obliging when it comes to rate-matching to get you a more affordable mortgage.
“As an existing client, it can be disheartening to see your bank offer new customers a lower rate to the one you currently have.
“Lenders regularly try to ‘win’ new customers by offering low rates. It is a great acquisition strategy.
“But if they refuse to match your current rate to this new offer, you can always contact a broker and refinance with a lender who is hungry to win your business.”
Mortgage brokers, on average, have access to a panel of 34 lenders and this creates competition amongst lenders. Mortgage brokers are also in a position to offer you a more in-depth and customised level of service. This can allow them to find their customers a mortgage product that may suit their current needs, wants and circumstances.
Click here for a list of Mortgage & Finance Association of Australia (MFAA) accredited brokers that can help.
If you’d like to share perspectives or discuss how it relates to you, call me on 0401 714 406 or email me at [email protected].
Thanks,
Darren