Puzzle Finance Blog

Pressure your bank into better home loan deals

Pressure your bank into better home loan deals
BORROWERS could snare up to $10,000 in hidden discounts on a typical home loan if they barter with the banks.

 With interest rates predicted to rise as early as tomorrow, Public Defender anonymously approached the big four to push for the best deal on a $400,000 loan.

All cut rates beyond the advertised variable figure.

NAB offered the cheapest deal, slicing its Choice Package from 6.54 per cent to 6.49 per cent.

The incentive came after Public Defender revealed inquiries with non-bank rivals.

Westpac pledged the biggest cut, shaving 0.1 per cent off its Premier Advantage Package.

The deal, dependent on consolidating other banking, would save almost $10,000 in interest over the loan's life.

ANZ dropped its already discounted variable rate from 6.71 to 6.66 per cent with relative ease - a saving of almost $5000.

The possibility of further cuts was also flagged.

Commonwealth Bank also offered an extra 0.05 per cent rate discount and waived a $350 annual fee in the loan's first year.

RateCity chief executive Damian Smith said the banks were touting more independence for branch managers and it was up to customers to put the claim to the test.

"My strong feeling is people spend more time haggling over the price of the home rather than the price of the loan," Mr Smith said.

"You pat yourself on the back because you knocked five grand off what you thought you were going to have to pay by haggling at an auction.

"But you go and do a bad loan and you spend more than that."

Canstar Cannex analyst Mitchell Watson said big banks could use "under-the-counter" discounts to compete with resurgent smaller competitors.

New home buyers with a sizeable deposit or those with other banking business were best placed to win a discount, he said.

An ANZ spokesperson said: "We are happy to consider discretionary pricing on rates on a case-by-case basis."

Commonwealth Bank said staff typically didn't give extra discounts because its Wealth package was already competitive, while Westpac said the 0.7 per cent discount on its Premier package was the most common.

NAB said it had offered the lowest standard variable interest rate of the big banks for 16 months.

"We note that in many cases our competitors are struggling to meet our standard offering, even if they are willing to offer discounts."


- Be prepared to walk if an institution won't offer a better deal.

- Physically show quotes and interest rates offered by competitors.

- Don't pay for loan features you are unlikely to use.

- Shop around. Many non-banks, credit unions and building societies are offering lower interest rates. 

- Ring your provider if you have an existing mortgage and ask what they will do to keep your business.

Posted by Wes Hosking - Herald Sun on 1st November, 2010 | Comments | Trackbacks

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