How I saved on my home loan

Get on the phone to demand a lower rate from your lender,

A HANDFUL of phone calls to my bank in the past year has saved me more than $21,000.

I’m not shy when it comes to pestering my bank and demanding a better deal.

Owner-occupier home loan rates are constantly moving, so it pays to check every few months what other lenders are doing and also have a snoop online to see what your own bank is offering new customers.

My wave of discounts started back in June last year, when I was on a rate of 4.02 per cent and frustrated that I was simply paying too much.

I was eager to get my loan under the magical four per cent mark — I’m always encouraging others to do the same based on the advice many home loan industry experts I speak to each week give me.

So when I got my lender to drop my rate to 3.94 per cent it certainly got me on a mini roller-coaster ride to see how much more I could squeeze out of my bank.

There’s no denying banks are on the nose at the moment in light of the horror stories coming out of the financial services Royal Commission, so they’ll be keen to do what they can to keep customers, not lose them.

Some quick online research of what banks are offering owner-occupier customers with a loan-to-value ratio (LVR) under 80 per cent revealed I could do far better. What came next was a series of rate drops each time I asked — moving from 4.02 per cent, to 3.94, 3.89, 3.79, 3.73 and now down to 3.68 per cent. For my loan that’s a saving of more than $21,000 over the full term. So undoubtedly it’s been well worth it. If you have a variable rate loan and an LVR rate under 80 per cent, you are in the box seat my friend.

Many of us are too time poor or simply can’t be bothered trying to squeeze a better deal from our bank.

But all it takes is a bit of online research, tapping some figures into an online mortgage calculator to see what you can save, then calling your bank’s home loan retention team to ask for a better deal.

Not once did I have to sign a form or fill out any paperwork, the bank did everything for me. But for those who don’t have as much luck, if your lender isn’t playing ball, demand a mortgage discharge form and tell them you’re out of there.

It’s often at this point they will move heaven and earth to make sure you don’t bolt out the front door.

Good luck!