The first step to getting a better interest rate on your home loan is to simply call your bank and demand one.
This is the advice News Corp Australia personal finance writer Sophie Elsworth gave on Your Money Live on Monday.
“Banks don’t want to hear from you. They’re not going to call you up and say, you’re paying too much,” she said.
“I had someone yesterday tell me they were on an owner occupier loan and paying 4.3 per cent. That’s way too high.”
Elsworth said if you suspect your provider isn’t offering the best deal, take action by following these steps:
- Make sure you thoroughly research other lenders online to get an idea of what deals are out there.
- Call other lenders and explain to them what your current lender is providing. Chances are they’ll offer you a better deal.
- If you do find a better deal, call your bank and ask for the home loan retention team. Tell them you’d like them to match the deal or you’re prepared to leave.
- Remember that it takes most banks a lot more effort to find new customers than to keep existing ones. They should work be willing to work hard to keep you.
- If you can’t get a better deal with your own lender, and you have to refinance, it’s not the end of the world. While there is a bit of paperwork to do, it will ultimately leave you better off.
- Just because the RBA isn’t moving rates, doesn’t mean you should wait for a change. Ellsworth said that banks are moving their rates around regardless, so it’s time for to start taking steps yourself.