How can I negotiate a better deal for my home loan?

With today’s record-low interest rates, the loan market is more competitive than ever with lenders seeking to attract new clients and maintain their current ones. This naturally benefits consumers, including those shopping for their first home as well as those who are looking for a better deal for their existing loan. However, it’s not always as easy as just asking your bank for a better deal, sometimes there are complicating factors. Don’t worry, most of these complications can be dealt with, you just need some professional help on your side.

Working with a mortgage broker

You could shop for deals on your own, compare hundreds of lenders with thousands of loan products, but why spend time and effort when you can have someone else do that for you? Enter the mortgage broker.

When you work with a mortgage broker, they’ll ask you what your needs are and about your personal circumstances. From there, they’ll compare loans that lenders offer and present you with loans that suit your personal circumstances and requirements. This helps to ensure you get the right loan.

Your mortgage broker will not only source the right loan based on your circumstances and goals, but they are well positioned to negotiate on your behalf to get better than advertised market rates. This may be with your current lender, or with a new, more competitive lender.

Other things to consider

The interest rate offered by a new lender is not the only thing to consider. There are other factors that determine whether you’re really getting a great deal.

If your initial interest rate is a discount rate that will increase after the first or second year, often called a honeymoon rate, then you should consider the competitiveness of the loan once the higher interest rate is in effect.

Another issue to consider is break costs or exit fees. What happens if you pay your loan down sooner by making additional regular or lump sum repayments? Your mortgage broker can help make sure you are not disadvantaged by making additional repayments.

It is advisable that before you switch lenders, seek a broker’s help so that you can find a deal that will truly benefit you over the short and long term. What’s more is that when you finally decide to take out a new loan, they will be able to assist you with the application process, from forwarding your documents to following it up on your behalf.

If you or someone you know hasn’t reviewed their loan in the last 2 to 3 years or are looking for a better deal, get in touch with our experienced mortgage brokers today.