{"id":8287,"date":"2018-02-16T02:45:53","date_gmt":"2018-02-16T02:45:53","guid":{"rendered":"https:\/\/amazingproperty.com.ng\/blog\/why-are-almost-half-of-all-aussies-failing-to-get-a-better-interest-rate\/"},"modified":"2018-02-16T02:45:53","modified_gmt":"2018-02-16T02:45:53","slug":"why-are-almost-half-of-all-aussies-failing-to-get-a-better-interest-rate","status":"publish","type":"post","link":"https:\/\/amazingproperty.com.ng\/blog\/why-are-almost-half-of-all-aussies-failing-to-get-a-better-interest-rate\/","title":{"rendered":"Why are almost half of all Aussies failing to get a better interest rate?"},"content":{"rendered":"

<\/p>\n

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Getting a better interest rate is a \u2018no brainer\u2019 way to save thousands on a mortgage<\/a>, but according to new research, half of Australians have never done it.<\/strong><\/p>\n

The Reserve Bank of Australia kept the cash rate on hold yet again at 1.5% this month but both fixed and variable rates continue to fluctuate, with economists recommending that now is the ideal time for borrowers to demand a better deal on their home loans<\/a>.<\/span><\/p>\n

Yet a survey of 1001 Australians last month by online home loan platform Lendi found just 41% of those with a home loan had ever successfully negotiated a better interest rate with their bank.<\/p>\n

\"bank<\/p>\n

Over half of Australians are likely paying more on their home loans than they need to. Picture: Getty<\/p>\n<\/div>\n

Lendi co-founder and managing director David Hyman said that leaves more than half stuck with an \u201coff the rack\u201d rate.<\/p>\n

\u201cIt\u2019s clear Australians are not confident in their negotiation skills, but by failing to bargain successfully with their banks, they are throwing away thousands of dollars every year,\u201d he said.<\/p>\n

\u201cThis is such a wasted opportunity, especially in an environment where living standards are being squeezed by low wage growth and rising costs,\u201d Hyman added.<\/p>\n

Finance specialist, John Tindall from Accumulus Home Loans in Sydney, agreed, saying a lower interest rate means more dollars in the pocket. It can translate to tens of thousands over the life of a loan, Tindall said.<\/p>\n

\u201cIt\u2019s a no brainer to try to get a better rate. You should always seek to pay as little interest as possible,\u201d he said.<\/p>\n

\u201cIf you\u2019re on a rate that is 0.5% higher than it could be, then you\u2019ll pay $52,000 more over the life of the loan, based on a $500,000 loan. That\u2019s the difference between 4% and 4.5%,\u201d he said.<\/p>\n

So why are Australians failing to negotiate with their lenders<\/a>? Tindall believed many people simply didn\u2019t know that competing offers were out there. \u201cAnd understandably, their current lender won\u2019t tell them!\u201d<\/p>\n

He said there was still time to act, though. \u201cWe are starting to see interest rates for some fixed rate loans start to move up and this can be a sign that the financial markets are expecting interest rates to be higher in coming years,\u201d Tindall said.<\/p>\n

\u201cThis is a sensible time to review your loans and potentially lock in some historically-low interest rates before they start rising in earnest,\u201d he added.<\/p>\n

Hyman said the survey also demonstrated that Australians are anticipating a rate rise this year.<\/p>\n

\u201cThere is a lot they can do to soften the blow. They just need to realise their bargaining power and sharpen their negotiation skills,\u201d said Hyman.<\/p>\n

\u201cBefore going to your bank to ask for a better rate, it\u2019s important to do your research and have your information in order.<\/p>\n

\u201cGenerally, if you have a loan to valuation ratio (LVR) of less than 80% you\u2019ll be in a good position to haggle.\u201d<\/p>\n

\"15<\/p>\n

If you have a loan to valuation ratio of less than 80%, you\u2019ll be in a good position to haggle a better rate. Picture: realestate.com.au\/buy<\/p>\n<\/div>\n

Hyman said the first step is understanding what interest rate and fees are being charged.<\/p>\n

\u201cThen, look at your LVR and your remaining loan term. Use that information to check out what is on offer<\/a> from your current lender and their competitors. This will give you a realistic insight into what you can ask for,\u201d he added.<\/p>\n

Tindall said a mortgage broker can also help review several lenders and present alternative options.<\/p>\n

\u201cBear in mind switching costs, such as discharge fees and break fees, can add up to about $1500, so seek this as a minimum benefit.\u201d<\/p>\n

\n <\/p><\/div>\n

Realestate au <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Getting a better interest rate is a \u2018no brainer\u2019 way to save thousands on a mortgage, … Why are almost half of all Aussies failing to get a better interest rate?<\/span>Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":8288,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"jetpack_seo_schema_type":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[4],"tags":[1403,1331,12908,543,347,1329,604,408,818,15301],"class_list":["post-8287","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opportunities-in-new-markets","tag-buy","tag-finance","tag-home","tag-home-buying-guide","tag-home-loan","tag-loan","tag-loans","tag-mortgage","tag-real","tag-translate"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2018\/02\/bank-lenders_2000x1500.jpg?fit=1885%2C1414&ssl=1","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":8279,"url":"https:\/\/amazingproperty.com.ng\/blog\/the-factors-that-are-really-increasing-your-mortgage\/","url_meta":{"origin":8287,"position":0},"title":"The factors that are really increasing your mortgage","author":"Amazing Property","date":"November 18, 2022","format":false,"excerpt":"Have you considered other factors that could be impacting or increasing your mortgage ? 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