September 30, 2014
The lending market is very competitive at the moment and some banks are offer special discounts to gain and to hold your business.
Here are a few things to consider when negotiation your interest rate:
1. Lenders will offer discounts off their standard variable rate usually on packages which include annual fees and offset accounts
2. The higher your debt and the lower your loan to value ratio (LVR) the larger the possible discount is.
$800,000 property value, $560,000 loan = 70% LVR
$600,000 property value, $540,000 loan = 90% LVR
3. You have to give a competitive comparison when requesting a discount. Your broker will be able to find relative comparisons for you.
4. Make sure you review your situation each year. Your property may have increased in value which could entitle you to a larger discount.
5. Every little bit helps. A $500,000 loan gaining an extra discount of 0.25% will save approximately $100 a month in interest charges which can to towards paying off your loan sooner.
6. There is no cost in asking for a discount, it is usually approved within 48 hours and applied to your loan within a week. Nothing else changes apart from your rate.
7. Speak to your broker today, or call us on 0499 643 643 or email firstname.lastname@example.org now to see if you are eligible.