Your mortgage interest rate can affect how much you pay by the end of your loan term. Lower interest rates can save you money in the future, but lenders may be reluctant to change your interest rates. However, there are some ways you can renegotiate your interest rate.
Find the lowest rate.
In order to be able to negotiate, you need to know what the lowest rate is. You want to know how low your lender can go with your interest rate. Usually, banks reserve their best rates for their new borrowers. You can find this rate by checking their website, finding the rates that non-bank lenders offer, or calling your lender and asking them for the best pricing.
When do lenders approve lower rates?
Typically, banks are willing to negotiate lower rates. However, some conditions may apply. If you have a low doc loan, have missed some repayments or are self-employed, your lender may not be willing to negotiate. Here are a few criteria to keep in mind when negotiating:
- Larger loans get better rates.
- If your loan is under 80% of the property value, your bank may negotiate.
- Lenders are more willing to negotiate home loans.
- New customers get better rates. Therefore, refinancing with a new lender might be the better option.
Maximise your discount
While there are several ways to do this, not every method will work for you. Common methods are:
- Applying for a guarantor loan
- Combine an investment and home loan
- Borrowing from your equity
- Switching to a fixed-rate loan when interest rates are low.
When you are trying to negotiate your interest rates, you must work with a mortgage broker. Mortgage House can help you negotiate a lower interest rate with your existing lender. If they are unwilling to negotiate, we can offer you loans with competitive rates.
