I just called to say …

DO you remember the last time your bank called out of the blue and said “great news, we’re giving you a cheaper interest rate on your mortgage because you’re just so darn loyal!”?

No? Neither do I.

Banks don’t give money away if they don’t have to. And they view your loyalty as laziness. You are not a flight risk, you pay their rates without question, so why change the good thing they’ve got going on?

Their best deals are for luring new customers. So, if you want to save, you’ve got to jump ship to a new lender, right?

That means all that admin work getting your loan application together, filling out forms, providing spending estimates and explaining the odd splurge on your transaction record …

and then doing it all over again every year or two just to be getting somewhere near the best deal?

Not necessarily. Banks want new customers, but they also want to hang onto their existing business.

And while my bank didn’t call me, my mortgage broker did. As part of his annual client review, he secured me a better interest rate with my lender.

Mortgage Choice’s James Algar said brokers saved thousands each year for customers by calling existing lenders to negotiate better deals.

“Banks make substantial margins on home loans and unless you push back they’ll be happy to let you keep paying more,” Mr Algar said.

“If you’re on a rubbish rate with your bank, that’s why they can afford to give a better deal to a new customer.”

Some people who are worried about rising interest rates have unknowingly been paying much more interest than they needed to for years.

While a phone call now could offset multiple future rate rises, going forward, borrowers should review their situation every 12 months.

“We had a client who was paying

3.19 per cent and wasn’t in a position to refinance,” Mr Algar said.

“In one phone call we got that down to 2.5 per cent, which will save him at least $10,000 a year.”