How Can I Get a Better Interest Rate?
Your interest rate can affect the final amount you end up paying on your home loan. Lower interest rates can save you money, but banks and mortgage lenders can be reluctant to change a borrower’s interest rate. There are ways to negotiate a better rate.
You need to know what the lowest rate is.
You can’t negotiate a lower rate if you don’t know how low your lender can go regarding your interest rate. Typically, banks offer their best rates to new borrowers. You can check their website to find out what new borrowers receive, find the interest rates that non-bank lenders offer, or call your bank and ask them for the best pricing.
You need to know when banks approve lower rates.
Banks typically will negotiate. However, if you have certain loan types, such as low doc loans, have missed a few repayments or are a non-traditional borrower, you may be unable to receive a lower rate from your bank. There are a few criteria that banks look for to negotiate lower rates:
- Large loans get better rates.
- Loans under 80% of the value of the property
- Home loans get better deals than investment loans.
- New customers get better rates. Refinancing your loan with a new lender might allow you to receive better rates.
You need to maximise your available discount.
There are many ways to do this, but not every method will work for you. You may be able to receive discounted rates with a guarantor loan, by combining an investment and home loan, by borrowing from your equity or by switching to a fixed-rate loan when your lender is offering low loan rates.
Working with mortgage brokers is essential if you are trying to negotiate a better interest rate. If your bank doesn’t negotiate with you, the team at Mortgage House can help. We can offer you loans with the best interest rates. No haggling is needed.