When was the last time you checked on your mortgage interest rate?
Maybe a better question would be when was the last time you renegotiated your mortgage interest rate?
The problem is many home owners and investors don't know they can renegotiate their interest rates by just asking.
The ACCC’s final report into residential mortgage prices serves as a wake up call and a timely reminder to re-negotiate yourmortgage interest rate.
The report found that just 11 per cent of variable rate mortgage holders with the banks investigated had the price of their home loan reduced in the year ending 30 June 2018, with many borrowers unaware they can negotiate on price.
The report also found that new customers were given lower rates than existing borrowers.
RateCity.com.au shows there are more than 185 home loan products marketed towards new customers, including Australia’s two largest banks, CBA and Westpac.
In the last few months, CBA cut their variable rates to as low as 3.79 per cent for new customers, while Westpac has cut their lowest ongoing variable rate to 3.98 per cent, again, for new customers.
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Sally Tindall, research director at RateCity, said customers should use the summer break to shop around.
“If you’re on a variable rate mortgage then you’re entitled to haggle for that rate,” she said.
“Find out what your bank is offering new customers, and if its lower, ask them to match it. It’s the least they can do for a loyal customer.
“The slow-down in home lending has made the banks hungry for business. Owner occupiers paying down their debt are a hot commodity in this market and can use the competition to their advantage,” she said.
While loyalty is lost on most lenders, there have been a few notable exceptions. NAB and ING have both recently hiked rates, but only for new customers.
“NAB and ING should be singled out for putting their existing customers first. It’s a refreshing change after a year of rate hikes for existing home owners,” she said.
What to do to check if your loyalty is being taken for a ride:
- Check the interest rate you are paying;
- Check the rate your bank is offering new customers for the same product;
- Speak to a proficient mortgage broker who has access to wide range of lenders and mortgage products.
You may also be interested in reading: What you need to know about mortgages