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Saved $10,000 over life of my home loan ... Sophie Elsworth says if she can do it, so can you. Call your bank or mortgage lender. Picture: Stuart Milligan
TWO quick phone calls to my bank this year has saved me thousands of dollars.
It’s a classic case of if you don’t ask you won’t get.
Part of my job involves the task many people would dread — monitoring home loan rates every week.
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FIXED OR VARIABLE: What should you do
So I decided to practice what I preach and phoned up my lender to demand a better deal — my rate is over four per cent but there’s many that are south of this.
I knew I could do better.
I’d already had success this year doing this, back in January I phoned up my bank and requested a cheaper interest rate.
And the result was good, they dropped my rate by 10 basis points.
Fast forward to now and I decided it was the perfect time to give myself a “summer home loan health check†particularly with Christmas looming and the wallet getting a significant workout.
Paying an interest rate of 4.29 per cent I was confident I could do better.
But what really left a sour taste in my mouth was that my lender was offering new customers better interest rate deals than I was getting.
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Loyalty to my lender meant a big fat nothing.
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I knew I could do better so that prompted me to pick up the phone one afternoon last week to ask for a better rate.
A few quick questions and the bank was keen to get me to lock into a fixed rate, but I was happy to leave my rate flapping in the wind and I decided to stick with a variable rate loan.
The polite man on the other end of the phone then asked me what deal had I seen that was better — I was able to roll off a few rates including their own that were hovering around the four per cent mark.
I was very clear to him I could nab a cheaper home loan deal if I jumped to another bank.
He then transferred me through to the lender’s retention department and bingo.
A couple more minutes on the phone and I was given an instant on-the-spot drop of six basis points to my loan.
Thank you very much Mr bank manager.
Two phone calls this year totalling about 10 minutes has saved me about $10,000 over the life of the loan, that’s a $1000 dollar saving per minute on the phone.
This is something the banks don’t want you to do, ask for more.
They rely on customers sitting on their butt and doing nothing.
Recently I spoke with a bank manager (not my own) and she revealed to me a very scary fact — the customers that ask for discounts usually get them and those that don’t ask get nothing.
She also conceded as a bank manager it’s not in her interests to offer the customer a better deal, the customer must do the hard work and ask themselves.
Surely that’s enough to make you get off your backside and phone up your bank.