Home loan customers simply have to ask their lender for a lower rate says John Symond

HOME loan clients are having interest rates cut by 50 basis points by simply asking the lender for a better deal. John Symond explains why.

BORROWERS are being urged to put pressure on their lenders for discounts as some customers are getting their interest rates slashed by 50 basis points by simply asking for a better deal.

Savvy customers who are hunting down competitive home loan interest rates are getting on-the-spot discounts by threatening lenders that they’ll vote with their feet if they don’t get a rate drop.

Founder of Aussie Home Loans, John Symond, said lenders offering “under the counter” deals was rife and competition had never been so fierce in his 40-year history in the mortgage industry.

“There’s some lenders offering deals and interest rates that are under the counter where they cut their advertised lending rates depending on the deal,’’ he said.

“In most cases they will come to the party with a discount because lenders realise it costs more to find a new customer than to keep an existing one.

“They are very keen to keep customers particularly when credit is slowing and the big banks especially are trying to maintain their book sizes.”

John Symond from Aussie Home Loans.

Some customers have told News Corp Australia they have phoned up their lender and got instant interest rate drops of as much as 0.5 per cent — one customer’s rate for an owner occupier loan fell from 4.75 per cent to 4.24 per cent simply by phoning up and asking.

Another customer was able to get three rate cuts within the past year when phoning up their bank — the latest drop was by 12 basis points last month.

Analysis from financial comparison website RateCity shows based on a $300,000 30-year loan the average standard variable rate is 4.72 per cent and the monthly repayments are $1560.

The total interest paid over the loan term is more than $261,000 but this would reduce to $229,400 if their rate fell by 50 basis points to 4.22 per cent.

Financial comparison website spokeswoman Sally Tindall. Picture: Supplied.

RateCity spokeswoman Sally Tindall said if you have “equity up your sleeve you have a very big bargaining chip in your hand.”

“Call up your bank and ask for a better rate and they are often willing to negotiate,’’ she said.

“Do your research before you call and know what other deals are available, banks are looking for owner occupiers with loan-to-value ratios below 80 per cent.”

The Reserve Bank of Australia kept the cash rate on hold at two per cent this month and it’s expected to stay there again when the board meets next month.

Mr Symond also suggests seeing a mortgage broker to get them to score you a better interest rate.

BEST HOME LOAN DEALS

Variable loans

Lender Product Rate Comparison rate

Reduce home loans Ratesetter offset, free fee loan 3.85% 3.86%

Mortgage House Pure and Simple 40 (60% deposit) 3.89% 3.89%

Homestar Finance Basic refinance loan 3.86% 3.9%

Pacific Mortgage Group Standard variable home loan 3.95% 3.95%

Freedom Lend Freedom Variable Loan 3.98% 3.98%

Three-year fixed loans

Lender Product Rate Comparison rate

Pacific Mortgage Group 3 year fixed loan 4.09% 3.99%

Freedom Lend 3 year fixed loan 4.14% 4.02%

Homestar Finance 3 year fixed loan 4.21% 4.07%

Reduce home loans Homeowners Dream Fee Free 4.18% 4.18%

iMortgage Elite Home Loan Fixed Loan 4.28% 4.19%

Source: RateCity

EMAIL:[e-mail]

Originally published as Home loan customers simply have to ask their lender for a lower rate says John Symond