Borrowers who haggle often get an interest rate discount from their lender

ACCORDING to experts, many mortgage customers can save tens of thousands of dollars just by asking their home loan lender one question.

HAGGLING with your home loan lender has proven to pay off for most and can end up in savings of tens of thousands of dollars over a loan term.

Many owner-occupier variable rates are below the 4 per cent mark and experts are urging customers to be chasing deals around 3.7 per cent otherwise they are simply shelling out money unnecessarily.

The Reserve Bank of Australia is strongly tipped to keep the cash rate on hold at 1.5 per cent when they meet again on Tuesday but customers should not remain complacent.

Haggle with your lender for a better rate on your home loan. Picture: iStock

New analysis by financial comparison website Mozo has revealed of 1400 mortgage customers about two in five have haggled for a better rate in the past two years.

Of those about 70 per cent had success and got a discount.

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Mozo spokeswoman Kirsty Lamont said about 44 per cent of mortgage customers said “more of us should be picking up the phone to dial up a discount”.

“Have a five-minute conversation with your lender to ask for a better rate and be prepared,’’ she said.

“Lenders reserve their better rates for their hardest customers so don’t just accept the first discount they offer, push for a second one because chances are it might be better.”

Mortgage customers should review their home loan interest rate every three months. Picture: iStock

Figures show on a $350,000 owner-occupier principal and interest home loan customers can save more than $36,000 over the loan term if they knock off an average of 0.5 per cent off their rate from 4.35 per cent to 3.85 per cent.

Another good trick is for existing borrowers to demand the same rate from their bank that they offer new customers — data from digital mortgage broking channel Uno Home Loans found 83 per cent of customers had success when doing this.

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Uno’s chief executive officer Vincent Turner said borrowers should check their mortgage cost quarterly.

Uno Home Loan’s chief executive officer Vincent Turner said customers should be putting pressure on their lenders to get a better deal.

“Tell them that they are giving this rate to new customers and you’re paying this rate — can they put you on this new rate otherwise you’re going to start looking around,’’ he said.

But he said for borrowers with a loan-to-value ratio above 80 per cent it is harder to get rate drops and instead the customer should focus on getting the LVR below this level so they have more bargaining power.

This means they won’t be slugged with expensive lenders’ mortgage insurance again if they shift lenders and have a LVR less than 80 per cent.

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@sophieelsworth