Borrowers are pressuring their lenders for better rates on home loans: research

HOME loan hagglers are scoring huge savings off their interest rates ... just by asking a question that puts pressure on their lender for a better deal.

Home loan haggling can leave customers saving as much as 1.45 per cent off the standard variable rate. Picture: istock

HOME loan hagglers are scoring themselves huge savings of up to 1.45 per cent off their interest rate just by asking.

While borrowing costs are at record lows, many borrowers could be missing out on whopping savings if they fail to put pressure on their lender for a better deal.

Financial comparison website Mozo completed a mystery shop by acting as a first homebuyer, refinancer and investor.

TOP FIVE SECRETS TO A BETTER HOME LOAN DEAL

The site rang all of the big four banks to try and negotiate a better deal off the standard variable rate in each scenario and every time they walked away with significant savings.

Borrowers are being urged to take action and go on the hunt for a better home loan deal.

Mozo property expert Steve Jovcevski said the results proved if borrowers are assertive and take action they can score themselves significant savings.

“If you’re an owner occupier with a good borrowing record and you’re paying more than 4 per cent, it’s time to pick up the phone and haggle yourself a lower rate,’’ he said.

“While investors may expect to pay a little more than owner occupiers, Mozo’s mystery shop showed the majors were prepared to offer them the biggest discounts, up to 1.45 per cent off the standard variable rate.”

The research found each big bank for every type of borrower offered a discount between 0.95 per cent and 1.45 per cent leaving borrowers with thousands of dollars extra in their pockets over the life of the loan.

The Mozo data shows the average standard variable rate for a first home borrower or refinanced with a $300,000 25-year loan is 5.25 per cent and for an investor it’s 5.49 per cent.

Experts believe owner occupiers should be able to snare deals with a “3” in front while for investors they get a competitive rate in the low four per cent range.

Owner occupiers with a typical $300,000 30-year home loan should be able to score a rate with a “3” in front.

The Australian Securities Exchange’s RateTracker which shows market expectations of a rate drop found there is a 14 per cent chance of a rate drop when the RBA board meets on Melbourne Cup day.

Mortgage Choice spokeswoman Jessica Darnbrough said the best thing borrowers can do is ask for a better rate.

“Go online, do your research and see what other lenders are offering in terms of interest rates,’’ she said.

“Once you are armed with that information, you can go to your lender and ask for a rate discount.”

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Originally published as Borrowers are pressuring their lenders for better rates on home loans: research