Switch Loans

Do you want to switch loans and move your home loan to another lender? Before you do this, have you tried negotiating a better deal with your current lender?

In September 2010, a survey by consumer group Choice showed that one-third out of over 2,000 Australians surveyed asked their financial institutions to reduce their rates on their home loans. The results showed:

• Almost 40 percent who convinced their bank to reduce their interest rate received up to 0.25 percentage points off
• A quarter were given between 0.25 and 0.5 percentage points
• A quarter between 0.5 and 1.00 percentage points
• One in 10 received between 1 to 2 percentage points off

However, 41 percent that asked for a discount didn't get the response they were hoping for and did not receive any discount as a result.

While negotiating with your lender can sometimes work for some people it might not work for everyone. Don???t be disheartened if you met with your bank and they wouldn???t budge as you may be able to find a better deal elsewhere. Try shopping around find one with a lower rate and switch loans, or check out the table below which shows some of the lowest variable rates currently advertised.

If you are not happy with your current lender, switch loans by comparing home loans online, you may be surprised.

If you want to try to negotiate a better deal with your current lender, below are some tips that could help you be better prepared:

• In addition to asking your lender for a reduction on your interest rate, also ask if they can reduce your fees or include some extra features. You won???t know unless you try!
• Spend some time online to compare home loans so that you can see what rates and fees other institutions are advertising. If you find that they are lower than what you getting, take this information to your lender to show them what their competitors are offering.
• Make sure that if you say that you will to take your business elsewhere that you mean it, because you may have to do this.

Also be aware that switching loans can be a costly exercise, so make sure you find out all of the fees and charges involved to exit from your existing loan as well as setting up the new one. Then do the calculations and work out if you will save more by making the switch.