Mortgage Haggling

Reporter: Tineka Everaardt

Australians are a loyal lot when it comes to banks, but suddenly that loyalty is being sorely tested. Almost fifty thousand home owners refinanced a record $12.5 billion worth of mortgages in the last three months of 2011 and we'll reveal the tricks and tactics to get you a better deal. "It was actually easier than i thought it would be", said Rochelle Carmichael. Rochelle owes $750,000 across two home loans. A mortgage broker helped her re-negotiate a variable interest rate of 6.3% with ANZ.

To get a better deal Rochelle will call three of the big four banks and the results will shock you. "Haggling is the best idea ... that is the only way to get what you want", said Herald Sun Deputy Business Editor, Stephen McMahon "At the moment, the customer is the winner, absolutely. So how many of us out there could actually be getting a better rate", he said.

"At the moment, the market is so competitive, all you have to do is phone your bank, put the pressure on them and they'll give you deals", he added. The Reserve Bank wasn't kind to us last week, keeping interest rates on hold. But the 'big banks' have gone in the other direction, increasing their rates and now angry homebuyers are breaking up with their banks like never before.

The bank switch boom has favoured the National Australia Bank. Last year it increased its housing mortgages by more than twenty billion dollars, up 13%. That's more than double the average growth rate of the other big three banks. "They've now pledged to keep their standard variable rate at the lowest level throughout the rest of this year", Stephen said. "Talk to the competitors, shop around online, you'll find a deal that is available to you at a price you're probably happy with", he advised. "Haggling with your bank makes them aware you're a customer who's done their research and they need to come to the party", Rochelle said.


Rate offered 6.3%

Standard rate 7.36 %

1.06% (arrow down)

Rochelle's rate of 6.3% is a good deal, even so Westpac agrees to match it -- more than one percentage point less than its standard variable rate today.


Rate offered 6.3%

Standard rate 7.22%

0.92% (arrow down)

NAB says they can do the same deal -- a discount of almost one percentage point on its current standard variable rate.


Rate offered 6.46%

Standard rate 7.31%

Commonwealth could only offer 6.4 over the phone. It's still less than its current standard variable rate.


Standard rate 7.30%

Current rate 6.3%

Fixed rate offered 5.86%

When she called her bank, ANZ and played hardball, they offered her an even better deal -- a fixed rate of just 5.6% over two years. This means, on a twenty-five year loan, Rochelle could save more than $200 a month. "Australians can save thousands", said John Allen who runs the website Tomorrow Finance.He says a better loan is only a click away. "They can see how much they actually can save by putting in their interest rate and also we pre-negotiate discounts from some of the banks as well", he said.

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