Dump a bad part­ner and save

Would your bank wave you good­bye, or grovel to get you back, asks

The Gold Coast Bulletin - - BUSINESS - So­phie Elsworth

DUMP­ING your bank isn’t that dis­sim­i­lar to dump­ing a lover.

Two things of­ten hap­pen: they ei­ther are happy to see the back of you or they’ll come back grov­el­ling in a des­per­ate bid to win you back.

I’m pleased to say the lat­ter just hap­pened from my bank.

You see, af­ter be­ing told a week ear­lier by my lender they would un­der no un­cer­tain terms drop my owner-oc­cu­pier in­ter­est rate (af­ter I phoned them up to say they were rip­ping me off), I re­quested a mort­gage dis­charge form.

I meant busi­ness. I wasn’t putting up with that.

It was kind of like a scene from the Bach­e­lor: you think you’re go­ing to be a handed a rose (in this case in the form of a rate cut) only be left emp­ty­handed and kissed good­bye once and for all.

Sit­ting on a rate of 3.89 per cent, I was an­gry when I learned a fam­ily mem­ber of mine who has a loan with the same lender was on a rate of 3.84 per cent.

She was pay­ing less than me and I wanted the same deal.

When I re­quest this ra­zor­sharp rate from the lender’s re­ten­tion team the lady on the other end of the phone said, “no, we only just gave you a rate drop in June when you phoned up, we can’t give you an­other one.”

Well what a load of rub­bish that was.

This is where you need to pay at­ten­tion and don’t be fooled by what your bank will tell you.

A few days later I rang a ri­val in­sti­tu­tion who of­fered me a deal of 3.74 per cent with no fees and I was about to make the jump when I thought I’d give my own lender one last try.

I was pre­pared to seal the deal and dump by lender, this time for good.

No go­ing back.

But I de­cided

I’d give them one last life­line.

“I’m about to switch lenders, are you sure there’s noth­ing else you can do or I’m out of here,’’ I said firmly.

Within a few min­utes of be­ing placed on hold my lender came back on the line and they’d changed their tune. “OK, this is what we can do, af­ter get­ting my man­ager’s ap­proval – which is very rare – we will drop your rate by 10 ba­sis points, so down to 3.79 per cent,’’ the lady said. “It will take about three to four days to process and we will no­tify you by mail when it’s done.” Bingo.

That’s all it took: some se­ri­ous tough talk­ing. While I didn’t get the ex­act same rate as I was be­ing of­fered with a ri­val of 3.74 per cent, it was enough to get me to stick it out and re­move the has­sle of switch­ing, which would have in­volved me pay­ing hun­dreds of dol­lars in fees and prob­a­bly out­weigh any sav­ings made.

On the av­er­age $300,000 30-year loan, a 10-ba­sis point cut re­sults in re­pay­ments fall­ing by $17 a month and a to­tal sav­ing of $6164 in in­ter­est costs over the life of the loan.

It’s frus­trat­ing to hear peo­ple com­plain they are pay­ing a rate with a “4” in front when lenders are ea­ger and des­per­ate to keep you or grab new busi­ness.

But the recipe for suc­cess is to be pre­pared to walk away – and make sure you let them know you mean busi­ness.

Good luck!

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