How to get the best mortgage deal with your bank you in order to keep your business. “Most of the time banks will reduce their rates, because the cost of acquiring a new client is far more than reducing their rate to keep an existing client.” “It’s better for them to keep the clients they’ve got.” Robinson says you should review your current interest rate against the current market rates every six months, and be prepared to go to your bank and renegotiate every 12 months. For many homebuyers, home loans are simply a case of “set and forget”. They get their loan, buy their home, start making repayments and simply leave the mortgage to do its thing. But what’s almost certain is that you can always get a better deal with your bank. And while chasing them regularly for a cheaper rate might seem like a hassle, it’s virtually guaranteed to save you tens of thousands of dollars over the life of your loan. Here how to approach it. Use a mortgage broker The easiest way to ensure you’re always getting the best rate possible, as well having your interest rate reviewed regularly without having to do the heavy lifting yourself, is to engage a mortgage broker. RBK Advisory director Jason Robinson says a mortgage broker’s main mission is to find the best loan for you and help you get the best price, and it’s also in their interest to review your loan regularly. “It’s in their best interest to keep you on their books, so they’ll review your loan continuously to ensure that you’ve got the best deal on the market,” Robinson says.
Follow the market There are dozens of banks and lenders in Australia that are all vying for your business, so why not use that to your advantage? Robinson says it’s a good idea to constantly compare a variety of rates offered by the big banks, as well as smaller lenders, so that you’re armed with as much information as possible and can jump on a better deal if you see one. That might mean asking your current lender to match a rival’s offer, or being prepared to take your loan to a new lender if they won’t. “Some of those left-of-field lenders, you definitely want to be comparing them to the big banks, because a lot of those big banks might be prepared to match them,” he says. Rid yourself of other debt When you approach your bank or lender for a loan, or a reduction in your current rate, they’ll immediately assess you on your current financial situation. And a major factor in that equation is your other debt. The banks will mark you down if you have substantial credit card debt or a huge car loan, so it’s best to lower your other liabilities as much as possible before trying to wrangle a cheaper rate.
Better yet, it’s the banks (not you) that actually pay for the mortgage broker, as a small percentage of the loan amount.
That could mean reducing your credit card limits, as the bank will assess you on your maximum liability.
Ask the question It’s so simple. Be prepared to approach your bank yourself and demand a better rate, or threaten to take your loan elsewhere.
“You might have a $15,000 credit card but only have $2,000 on it, but the banks will assess you on the $15,000, which of course will affect your borrowing capacity,” Robinson says.
In most cases, they’ll be prepared to sharpen things for
Article source: https://www.realestate.com.au/advice
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