Quick call leads to big rate cut
THAT’S it, I’d had enough.
I decided it was time to break up with my bank.
After the Reserve Bank of Australia governor Philip Lowe cut the cash by 0.25 per cent, my lender decided they were only going to pass on some of the cut.
They wanted a slice of the pie too so they only handed me a 0.15 percentage point drop, leaving me paying an owner occupier principal and interest rate of 3.33 per cent.
Home loan rates are now as low as 2.74 per cent so I figured I could do far better.
I scrolled online, looked at a rival lender who could offer me 2.84 per cent and lodged my personal details with them awaiting a call back to see if I could sign up.
In the meantime I thought I’d give my lender one last ditch attempt to keep me.
I phoned them up and asked to be put through to the home loan retention team.
When I was put through to the polite bloke at the other end of the line, let’s call him Jack, I told him enough was enough.
“I’m getting jibbed here on my rate, you need to give me something better because passing on a 0.15 percentage point drop isn’t good enough,” I said.
“I’m about to switch to another bank unless you come to the party.” Now, let’s make this clear. I’ve got a bit of a history with my lender, I phone them up at least three or four times a year and demand a better deal.
So sometimes they know I’m all talk and no action, I say I’m leaving and don’t, but this time I was serious.
However Jack was quick to point out I do call them up regularly.
“I see you’ve phoned us up a few times but it’s been a while since we’ve reviewed your rates (it’s probably been about six months),” he said.
Jack then asked if I was ringing up on the back of the latest rate cut to which I said, “damn right I am”.
“You didn’t pass on the full cut and it’s not good enough,” I said.
He replied, “OK just hang on and I’ll see what I can do.” That’s when I knew I was about to get something better from my lender.
Within the blink of an eye he was back on the line to reveal the good news.
“We’ve managed to take a look at your loan and yes we can offer you a better rate, we’ll take some more off,” Jack said.
They cut my rate again, this time by 0.16 percentage points bringing it down to 3.17 per cent.
It will save me thousands in interest costs and help me pay off my loan a few months earlier.
So definitely pick up that phone and talk tough with your lender.
I saved money and didn’t even have to do a scrap of paperwork. Winning! Sophie Elsworth is the national personal finance writer at News Corp.