If you feel like your home loan repayments will never come to an end, the key can be as simple as negotiating to get a lower interest rate. It’s worth regularly reviewing your home loan to make sure you always have the lowest rate possible.
According to Lendi, there can be significant savings by doing some simple steps to get a cheaper interest rate on your property loan.
1. Ask for the same rate new customers get
Don’t be afraid to contact your lender and ask for a better deal. Speak with confidence and ask for the same rate offered to new customers. You may find lenders will be willing to negotiate to retain their customers, provided you are in a strong position with no missed repayments etc.
If you have a good credit history and have been paying off your home loan over the past 10 years with no late repayments, you could be in a strong position to negotiate.
Negotiate the rate with your lender and you may be surprised how quickly they can be persuaded to lower your interest rate.
2. Do your research
Before speaking to your lender about lowering your interest rate, shop around and compare what rates other lenders are offering for your situation.
Show your lender that you know there are lower rates available, this can be a great bargaining chip when it comes to asking them to lower your interest rate.
Even so, you should shop around and see what other lenders can offer you. Your lender may be unwilling to budge and you may decide to refinance with someone else. This brings us to the next step.
When it comes to negotiating, you should always be prepared to walk away.
If your lender is refusing to buckle and offer you a competitive rate, don’t be put off by the process of refinancing.
Nowadays, the process of switching lenders is fairly simple and can be completed in as little as a week in some cases. Hence, if lowering your interest rate is important to you, be ready to change lenders.
As already mentioned, use your loyalty as a bargaining chip if you must. Many borrowers stay with the same lender for years, and if you have a good history with them, it can help when it comes to negotiating a lower rate.
Be the borrower banks love to lend to and give yourself the best chance of nabbing that low rate. Lenders look for a number of key things before calculating your interest rate.
Lenders want borrowers with:
Be aware of the factors that may hinder your negotiations: