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

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. 

“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. 

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?

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

About Brett Warren Brett Warren is National Director of Metropole Properties and uses his two decades of property investment experience to advise clients how to grow, protect and pass on their wealth through strategic property advice.