Advice on Getting or Negotiating a Lower Variable Home Loan Interest Rate

Magicmagic on 18/09/2022 - 16:35

Hi all

Do you have any advice on getting or negotiating a lower variable home loan interest rate? Have you gotten your bank to match a lower rate of another bank? If so, which bank did you quote that your bank would match? It would be good to hear your advice and stories from people who have experience doing it.

I have a variable rate home loan with Virgin Money (rate now at 4.89%) and thinking of trying to save some money by calling them up to see if they will match a lower rate from another bank. I figured saying that I might move or refinance to another bank with a lower rate may be a possible way to negotiate.

Some of the smaller banks (e.g. ubank, athena) have lower rates.

Cheers!

Financial Home Loan Loan

Comments

  • footyboy on 18/09/2022 - 16:52
    +11

    Broker here;

    Step 1 - find a like for like comparable home loan

    Step 2 - call your bank and ask to speak with the "retentions" team and quote your comparable offer from step 1.

    Step 3 - see what they can offer, escalate if you need to

    Step 4 - (if step 3 didn't work) submit a "discharge form" to advise them of your intention to leave, they might offer your their shiney new customers deal

    Step 5 - contact your mortgage broker to find the best deal that you're actually eligible for (it's highly unlikely you qualify for every bank)

    Good luck 👌

    Aidan.

  • brendanm on 18/09/2022 - 17:52
    +5

    Just refinance, get a lower rate and a cashback.

  • Trying2SaveABuck on 18/09/2022 - 21:43
    +1

    i called me bank said i wanted a lower rate copied a 'few' of the deals here on Ozbargain said i had talked to these lenders and i can get on these deals

    note some of the deals i was not eligible for due to the amount you needed to borrow etc - but i didnt copy the 'eligibility details just the 'deal themselves' i had a feeling the loan specialist would be 'too lazy' to chase up the eligibility

    they offered me the same as the lower rate and the cashback i would of got with refinancing all in all i sent 2 emails and made a 6 min phone call knocked my rate down and scored 3k cash back

    • Clear on 18/09/2022 - 22:42

      I was with me bank before refinancing this year and they straight up accused me of lying to them about their competitors lower rates. They lost a lot of business during that phone call.

    • CodeXD on 19/09/2022 - 10:42

      Which bank is this? Sounds like a great retention team.

    • jezza p on 28/09/2022 - 21:46
      +1

      Do you mind telling us which bank this is? Currently looking at refinancing, this sounds like the kind of bank I actually would want to stick with.

      If anyone here is with NAB…save yourself some time, don't bother with their retention team. Just find a broker and refinance. It was such a pain in the backside dealing with them. Long story short, they were disorganized and never followed up on what they said they would do. The first person I spoke to never called me back as promised (apparently he left a note on my file saying "if he calls back, put him through", when he was supposed to be the person returning the call). Second person went on leave without handing over the case to anybody. Third person finally did something. After having to repeat the story to 3 different people from their retention team, they offered me 0.05% rate reduction citing my long relationship with NAB and they tried to convince me to stay as they pride themselves on their service when I literally had to call them multiple times after they failed to follow up as promised. I don't know how he doesn't see the irony. The guy agreed to apply the 0.05% discount in case I don't end up leaving. Guess what, even that 0.05% was never actually applied. lol

      • Edgecrusher on 11/10/2022 - 17:11

        Sounds like me, I rang and got offered:
        1. $500 retention bonus after 90 days
        2. Wage of $390 annual fee for this year
        3. 0.15% discount (was done instantly)

        I accepted the offer over email, 2 months later got slugged with point 2, I guess point 1 is not happening either.

        Good to see NAB milking it for everything they can.

        I opened a credit card and placed it on my annual package too (I closed my old card) despite the package giving me a free cc, guess what, slugged me that fee too, took a month and three complaints to resolve that one, the package fee just hit today, hit live chat and they didn’t want to know, asked me to make an appointment with a lending specialist!

        • jezza p on 11/10/2022 - 22:48

          Honestly, life is too short to deal with these people. No wonder why out of the big 4s, most of my colleagues are with…well…not NAB. I ended up refinancing with another bank after my colleague referred me to her banker, got a competitive rate, LMI waiver, and 5k cashback in my pocket. The process has been a lot less painful than I thought it would be. I still have my CC with NAB at the moment since I got grandfathered the CC fee waiver as part of my shareholder benefit despite the fact that I sold my position in NAB many years ago. My impression of NAB, based on many years of relationship with them, is that they can be quite slack and make mistakes that would take you, a customer, a lot of effort to fix. There were multiple occasions where they promised something that didn't materialize. Maybe consider refinancing if you don't have LMI to worry about. There are so many cashback offers out there that can offset the cost of refinancing plus way more.

      • Trying2SaveABuck on 19/10/2022 - 20:16
        +1

        Do you mind telling us which bank this is? Currently looking at refinancing, this sounds like the kind of bank I actually would want to stick with.

        i have been in the penalty box until today thus the long time to reply

        HSBC

  • p1 ama on 18/09/2022 - 22:05

    I have a variable rate home loan with Virgin Money (rate now at 4.89%) and thinking of trying to save some money by calling them up to see if they will match a lower rate from another bank. I figured saying that I might move or refinance to another bank with a lower rate may be a possible way to negotiate.

    That's a very high rate, you should definitely be calling up and saying that you are planning to refinance and that several of your options are X (rate: ??), Y (rate: ??), and Z (rate: ??) which are significantly lower than the rate you are getting. They will likely offer you a better deal to retain you, but be prepared to walk away if they do not.

    • kyle on 19/09/2022 - 06:18

      The rate could be justified depending on the LVR and the borrower's circumstances

  • Overclocked91 on 19/09/2022 - 07:16

    We just refinanced. I approached my bank directly and they said they wouldn't move on it. So, I left. We used a broker to find our deal and a lot are doing cashback too.

    • Magicmagic on 19/09/2022 - 17:13

      Who did you refinance with and what rate did you get?

      • Wiadro on 19/09/2022 - 21:50

        ive just moved from athena to unloan

      • Overclocked91 on 20/09/2022 - 07:14

        P&N 2.89% (has probably gone up 0.5% now tho) + 3K sign up. LVR below 80%

        • 10khours on 21/09/2022 - 14:09

          it will be 3.54% after the rba 2 august decision (unloan already announced on their website) and probably about 4.14% (the september increase has not been announced on the unloan website yet) after the RBA september 6 decision.

          Still a good rate but people should be careful looking at interest rates that have not passed on the 2 most recent rate increases.

          • Overclocked91 on 22/09/2022 - 07:19

            @10khours: Sorry P&N rate was 2.84 and is now 3.34. Yeah, fully understand. We moved from St George which is now 4.49 so was a good move for us.

  • buckster on 19/09/2022 - 07:31

    Never had luck, banks always refused to budge, just refinance because end of the day if someone can offer a better deal why stay "loyal" to a lender that doesn't see you as more than part of their income.

  • mini2 on 19/09/2022 - 07:54

    Refinance is always the answer but if you're stuck with your bank for whatever reason (LMI?), try asking them to match their advertised rate for new customers.

    Might not be the lowest in the market but beats paying 4.89%…

  • Vote for Pedro on 19/09/2022 - 16:16

    So what the best variable rate out there right now with an offset?

  • Sleeqb7 on 20/09/2022 - 10:33
    +1

    I called my existing bank and asked for a lower rate, as I could get 1% cheaper with other banks. So they reduced my rate by 1.01%.
    My current loan is too small to qualify for cash back deals, so this was the best solution.

    • El-Rhi on 22/09/2022 - 07:57
      +2

      My current loan is too small to qualify for cash back deals

      Why don’t you just equity cash out up to the minimum amount to get the cashback then put it back in the loan? This is what I do

  • bumperplates on 21/01/2023 - 12:35

    How long is recommended to stay with a bank after refinancing? Does it make sense to refinance again after 12 months if having received a cashback offer, and the rate increases drastically?

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