Q. I’ve been with my lender for five years now and I’m pretty happy with the service they provide. They passed on quite a few rate cuts over the last couple of years, but lately I’ve been seeing some lower rates advertised. What’s the best way to approach my bank for a better interest rate?
A. In today’s highly competitive mortgage market, it’s definitely smart to ask your lender for a lower interest rate. After all, what’s the worst that can happen?
Asking might make you feel a bit uncomfortable or awkward, but it’s actually quite common, easy to do and can involve just one phone call.
Call your bank, say you’ve noticed some low rates in the market and you want to know what’s the best rate they can offer you. The rest is up to them.
You could go into more detail and point out that you’ve been a good customer with them for five years but you shouldn’t need to do this. Lenders like to keep good customers, so you might be surprised at what they’ll offer you.
Some lenders have rules around how often they will lower an interest rate, so if they have recently reduced your rate within the last six to 12 months, they might not consider another reduction so soon.
If they say no without giving a reason that satisfies you, then maybe it’s time to consider whether it’s still the right home loan.
If you have a mortgage broker they can even do the asking for you, and leverage their own relationships with your lender to try and get you a lower interest rate.
Do you have a question for John? Leave it in the comments below and check back each Sunday to see if your question has been answered!
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