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Borrowers should demand lower home loan rates

Borrowers should demand lower home loan rates
Date of Publication: Tuesday, 05 August 2014 15:47

Homeowners with a mortgage should demand discounts on their home loans because the climate is favourable for lending right now, according to an influential banker.

 

People with a mortgage are being urged not to accept rates of 5% or above, because banks are currently able to raise funds at much cheaper rates.

 

The recommendations come from Bernie Fraser, the chairman of ME Bank and the former governor of the Reserve Bank.

 

Mr Fraser said that consumers should feel entitled to shop around and to encourage banks to compete for their custom.

 

“It’s appropriate that they should be reflecting that in their interest rates independent of whatever the Reserve Bank will be doing,” he said.

 

“Existing customers can find a cheap variable rate at another bank and usually their own bank will say: ‘OK, we’ll match it.’ I think there’s a lot of that going on.”

 

Mr Fraser added that international interest rates had fallen, which was easing cost pressures for major banks. This should enable them to offer cheaper rates to homeowners who are prepared to drive for a bargain.

 

What’s Available Below 5%?

Variable rate home loans are available from 4.54% through loans.com.au, though there are also deals which creep below the 4.5% mark if homeowners are willing to fix rates for a year.

 

The Which4U home loan listings are supported by Yellow Brick Road, whose executive chairman, Mark Bouris, has supported the calls for customers to negotiate with lenders.

 

“There are so many options below five per cent right now that I’d be telling anyone paying more than that to take a good hard look at what’s on offer,” he said.

 

“Approach your lender first and see what they can offer you," he added.

 

“Ask questions and if you’re not getting the answers you’re looking for, ask to speak with someone higher up the rank.”

 

James Booker
Which4U

 

If you enjoyed this article, check out the latest articles on our Finance Blog.

Tuesday, 05 August 2014 15:47
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