How to talk your way to a lower interest rate

Alex Ritchie

Alex Ritchie

( 6 min read )

If you’re currently paying off a mortgage, there’s an interest rate cut waiting for you if you simply ask for it.

Negotiating with your bank for a cheaper home loan may seem like an intimidating task that only a financial expert could manage, but you’d be surprised at how easy it is. Simply put, anyone can talk their way into a cheaper home loan, they just have to know what to say.

Borrowers need to shop around and be prepared to walk away if their lender doesn’t offer them the discount they deserve.

RateCity tips to haggle for a cheaper home loan: 

  1. Find your current interest rate

Many people aren’t aware of their current interest rate, particularly if they’re paying a variable loan. Your first step to haggling for a better home loan rate is to work out your current one. It should appear on your bank statement, through online banking or your banking app.

  1. Are you an ideal borrower?

If you’ve been paying back your mortgage for a while there are a few factors that should present you as an “ideal” borrower, meaning you are more likely to nab a lower rate.

More ideal borrower
  • If you live in the property
  • If you own 20 per cent or more of the property
  • If you are employed full time
  • If you are paying principal and interest
Less ideal borrower
  • If you are an investor paying for an investment property
  • If you have missed mortgage payments
  • If you are paying interest-only
  • If you still owe more than 80 per cent of the loan


If you tick one or more of the less ideal borrower traits, this doesn’t mean you won’t be able to haggle for a lower rate! It’s just worth keeping in mind that your bank may already be charging you a comparatively higher interest rate. More

Also, there may be elements of your loan you can change to present yourself as an ideal borrower, and ultimately give yourself more bargaining power when you ask for a lower rate.

  1. Research your own provider’s rates

Most home loan providers offer lower, more enticing rates for new customers. But why should new customers be rewarded with lower rates when you’ve shown loyalty to your home loan provider?

The best way to find these discounted rates is to check your bank’s website, check RateCity’s home loan tables or even call your bank pretending to be a new customer to learn what discount rate they offer.


Nick is currently paying the Westpac standard variable rate on the Rocket Repay Home Loan of 5.24 per cent. He logs on to the Westpac website and sees that they are offering a special offer for the Rocket Repay Home Loan of a discount of 60 basis points, reducing the interest rate to 4.64 per cent. However, Westpac states that “discounts do not apply to internal switches”, meaning this lower rate is for new customers only.

When you armed yourself with these lower rates from your provider and their competitors, you’ll have a much stronger argument when asking for a cheaper rate. After all, why should new customers pay lower rates on your home loan or similar products? If your bank is willing to let other customers pay a lower rate, they should be willing to let you do so too.

  1. Research competitor rates

There is a wide range of Australian home loan providers who are willing to charge their customers lower interest rates, including your current provider. Before you call up your provider requesting a lower rate, it pays to do your research.

The average owner-occupier variable interest rate was 4.66 per cent (as at January 2018). If you’re paying a higher than average interest rate on your mortgage, it’s crucial you look outside of your provider. 

Use RateCity’s home loan comparison tool to find the lowest rates offered across the market.



  1. Present all your research

Once you have gathered all your research you should be ready to talk to your home loan provider.

Let them know you want a lower rate, because:

  • You are a reliable borrower for one or more reasons listed earlier, and a loyal customer of theirs.
  • Existing borrowers are paying lower rates (provide examples) and you don’t think it’s fair that loyal customers aren’t being treated the same.
  • Their competitors charge a lower rate for a similar loan types, and that you’re not afraid to refinance.

Keep in mind…

Some home loan providers need you more than you need them. They profit from the fact that most Australians are too scared to ask for a lower rate, and they’re always more likely to offer you one instead of letting you walk away.

  1. Call their bluff

News Corp personal finance writer, Sophie Elsworth, is an expert at haggling for a cheaper home loan. She emphasises the importance of knowing your worth as a customer, and not being afraid to call their bluff if needs be.

Asking for a mortgage discharge form is a great way to show you mean business. And at the end of the day, if your home loan provider is still not willing to offer you a lower rate you should be prepared to refinance; if this is a financially viable option for you.


Low rate loans on the market: 

Home Loan Provider

Home Loan Product

Comparison Rate

Mortgage House

Moneyer – Pure & Simple Summer17


Freedom Lend

Freedom Variable Home Loan


Reduce Home Loans

Rate Lovers Variable Home Loan


Homestar Finance

Variable Rate Home Loan


Essentials Home Loan


RateCity data: Owner-occupier variable rates paying principal and interest as at February 2018.

Compare your product with the big 4 banks, or add more products to compare