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This question could save you $20,000 on your mortgage

Want to save money on your mortgage?

You could if you ask the right question.  30307218_l2

All you have to do is ask for a better rate.

Yet about 45 per cent of homeowners are not requesting a lower interest rate when applying for a loan, a survey conducted by finder.com.au has found.

Bargaining a better mortgage rate is a skill mastered by one in three Australian homeowners.

The survey of 1,286 homeowners reveals one in three (33%), — equivalent to nearly four million people across the country — report having been successful in negotiating a lower interest rate on their home loan.

  • Forty three percent of homeowners have attempted to get a discount and of those who asked, 77% were successful.
  • The research also shows almost half of homeowners (45%) didn’t know you could ask for a discount or simply didn’t bother to request one upon application.
  • Men (37%) were more likely than women (29%) to have asked for and received a rate discount.

Bessie Hassan, Money Expert at finder.com.au, says mortgage holders need to embrace negotiation. 

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“Don’t settle for the advertised rate. Have the confidence to ask for a lower rate, and reap the reward that will come with making smaller mortgage repayments.

“If you don’t ask, you don’t get,” she says.

A discount of 0.2 percentage points could save you $20,000 over the course of the average mortgage.

Generation X were the most likely to have received a discount (38%) followed by Generation Y (32%).

Perhaps surprisingly, Baby Boomers were the least likely (28%) to secure a rate discount.

West Australians were the most discount-savvy state, with 39% having received a discounted rate by asking, while Tasmania (26%) was the least likely to have received a lower rate.

Twelve percent of respondents were offered a discount without requesting one.

“Right now, unless your mortgage rate has a three in front of it, you could be getting a better deal. If your lender won’t give you a discount, it’s time to jump online and compare,” Ms Hassan advises. bank-savings-house-couple-save-property-meeting-budget-300×199

When deciding what home loan features are most important (aside from interest rate), fees topped the list.

According to the survey, respondents think fees (36%) are the most important aspect, followed by the ability to make extra repayments (28%) and the use of an offset account (18%).

“When reviewing home loan options, fees trump nearly all else.

However, it appears Australians are becoming savvier when understanding the value of making additional repayments and using a linked offset accounts,” Ms Hassan says.

Have you negotiated a lower interest rate when applying for a home loan?

Response Percentage (%)
No. 36
No, I didn’t know you could ask for a discount. 9
Yes, I asked for one and was successful. 33
Yes, I asked for one and wasn’t successful. 10
Yes, I was offered a discount without asking. 12
Source: finder.com.au

Aside from interest rate, which features would be the most important when selecting a new home loan?

Response Percentage (%)
Fees. 36
Ability to make extra repayments. 28
Offset account. 18
Redraw facility. 13
Portability. 5
Source: finder.com.au


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About

is a Property Strategist with an accounting background and over 30 years’ Commercial Banking experience. She is a passionate property investor who enjoys helping her clients create wealth through property investment using Metropole’s strategic approach.
Visit www.MelbourneBuyersAgent.com.au


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