How to haggle for a better deal

Whether you’re doing your weekly grocery shop or hunting down a low rate mortgage, the thought of a bargain is all too enticing. If you can get a cheaper price than what’s marked down, you’d take the better deal, right?

Make sure there’s more money building up in your savings account by following this great guide to haggling!

Watch your loyalty

Loyalty cards advertise great savings but are the cards rewarding you — or the stores who provide them to you? Are you actually getting a bargain by using them?

According to consumer group CHOICE, loyalty schemes can discourage customers from seeking better deals elsewhere.

“Loyalty cards are used to collect enormous amounts of personal data when you do your shopping, such as whether you buy anti-cholesterol margarine, prefer organic food or eat certain snack foods,” explained Elise Davidson, CHOICE spokeswoman.

If you want to master haggling, it might pay to ditch store and brand loyalty. Budget brands – from airlines to cereal manufacturers – can offer drastically lower prices than their fancy counterparts. 

See the world

If an overseas holiday is on the cards, your first port of call is booking flights. 

Depending on where you’re headed, costs can quickly add up. Rather than having to dip into your savings account to pay for a few weeks away, consider bargaining down the price. 

Just as you’d run a credit card comparison to get a better deal, do the same when booking airfares. Peruse flight booking websites to find the cheapest deal for your destination, and consider flying early morning or late night to scoop up a low-cost fare.

“We constantly tell would-be flyers to search for flights early and often. This doesn’t necessarily mean to buy early — in fact, most of the time we suggest waiting. But you want to become familiar with the market on your exact travel dates so you know what’s a good fare,” Travel comparison website, CheapAir, advised.

“Be ready, though. When you do see a good deal, you’ll want to grab it, as great fares don’t typically last for very long.”

Rather than taking a break during a peak holiday period, see if your local flight booking centre has any last minute or off-peak tickets they’re keen to offload.

Slash your home loan rates

Whether you are a first home buyer, a property investor or you already have a mortgage on your family home – haggling for a better deal could save you thousands — and years —off your home loan.

“Use a comparison site to find the top home loan interest rates, fees and features and then ask your lender to match it. If they aren’t prepared to negotiate on rates or fees then switching to another lender who will, could potentially save you thousands of dollars,” Alex Parsons, CEO of RateCity.com.au, suggested.

Feed the family

Want to lower your grocery bill? You’ll have little luck haggling for a lower price at supermarket chains, though you can still nab good deals. But bakery and deli items will often be discounted later in the day or early evening to make way for fresh stock the following day.

If you like the thrill of haggling down prices, you may have better luck at a smaller owner-operator grocery stores, bakeries or butcheries, where those cashing up your order have the authority to offer a lower price. 

Scan items for upcoming expiry dates — you may be able to knock a few dollars off a grocery item if it needs to be consumed relatively soon.

Dress to impress

Have some basic sewing skills? If you find a shirt, jumper or pair of pants at your favourite clothing store with a frayed cuff or missing button, you may be able to drive down the price. 

If there are other items in your size and preferred colour in perfect condition, you may be less likely to get a discount. But if the item is the last one of the rack, you may be able to get a discount by politely asking a sales assistant — particularly if the store is keen to clear stock to make way for new season’s clothing.

Whether you are buying bread, a new hand-bag or booking a flight, the trick to haggling is not being afraid to ask. As the saying goes, “if you don’t ask, you don’t get.”

Did you find this helpful? Why not share this article?

Advertisement

RateCity

The money talks which you don't need to avoid any more

Subscribe to our newsletter so we can send you awesome offers and discounts

Advertisement

Learn more about home loans

How do I refinance my home loan?

Refinancing your home loan can involve a bit of paperwork but if you are moving on to a lower rate, it can save you thousands of dollars in the long-run. The first step is finding another loan on the market that you think will save you money over time or offer features that your current loan does not have. Once you have selected a couple of loans you are interested in, compare them with your current loan to see if you will save money in the long term on interest rates and fees. Remember to factor in any break fees and set up fees when assessing the cost of switching.

Once you have decided on a new loan it is simply a matter of contacting your existing and future lender to get the new loan set up. Beware that some lenders will revert your loan back to a 25 or 30 year term when you refinance which may mean initial lower repayments but may cost you more in the long run.

When should I switch home loans?

The answer to this question is dependent on your personal circumstances – there is no best time for refinancing that will apply to everyone.

If you want a lower interest rate but are happy with the other aspects of your loan it may be worth calling your lender to see if you can negotiate a better deal. If you have some equity up your sleeve – at least 20 per cent – and have done your homework to see what other lenders are offering new customers, pick up the phone to your bank and negotiate. If they aren’t prepared to offer you lower rate or fees, then you’ve already done the research, so consider switching.

How do I take out a low-deposit home loan?

If you want to take out a low-deposit home loan, it might be a good idea to consult a mortgage broker who can give you professional financial advice and organise the mortgage for you.

Another way to take out a low-deposit home loan is to do your own research with a comparison website like RateCity. Once you’ve identified your preferred mortgage, you can apply through RateCity or go direct to the lender.

How can I get a home loan with bad credit?

If you want to get a home loan with bad credit, you need to convince a lender that your problems are behind you and that you will, indeed, be able to repay a mortgage.

One step you might want to take is to visit a mortgage broker who specialises in bad credit home loans (also known as ‘non-conforming home loans’ or ‘sub-prime home loans’). An experienced broker will know which lenders to approach, and how to plead your case with each of them.

Two points to bear in mind are:

  • Many home loan lenders don’t provide bad credit mortgages
  • Each lender has its own policies, and therefore favours different things

If you’d prefer to directly approach the lender yourself, you’re more likely to find success with smaller non-bank lenders that specialise in bad credit home loans (as opposed to bigger banks that prefer ‘vanilla’ mortgages). That’s because these smaller lenders are more likely to treat you as a unique individual rather than judge you according to a one-size-fits-all policy.

Lenders try to minimise their risk, so if you want to get a home loan with bad credit, you need to do everything you can to convince lenders that you’re safer than your credit history might suggest. If possible, provide paperwork that shows:

  • You have a secure job
  • You have a steady income
  • You’ve been reducing your debts
  • You’ve been increasing your savings

What is the best interest rate for a mortgage?

The fastest way to find out what the lowest interest rates on the market are is to use a comparison website.

While a low interest rate is highly preferable, it is not the only factor that will determine whether a particular loan is right for you.

Loans with low interest rates can often include hidden catches, such as high fees or a period of low rates which jumps up after the introductory period has ended.

To work out the best value for money, have a look at a loan’s comparison rate and read the fine print to get across all the fees and charges that you could be theoretically charged over the life of the loan.

What are the pros and cons of no-deposit home loans?

It’s no longer possible to get a no-deposit home loan in Australia. In some circumstances, you might be able to take out a mortgage with a 5 per cent deposit – but before you do so, it’s important to weigh up the pros and cons.

The big advantage of borrowing 95 per cent (also known as a 95 per cent home loan) is that you get to buy your property sooner. That may be particularly important if you plan to purchase in a rising market, where prices are increasing faster than you can accumulate savings.

But 95 per cent home loans also have disadvantages. First, the 95 per cent home loan market is relatively small, so you’ll have fewer options to choose from. Second, you’ll probably have to pay LMI (lender’s mortgage insurance). Third, you’ll probably be charged a higher interest rate. Fourth, the more you borrow, the more you’ll ultimately have to pay in interest. Fifth, if your property declines in value, your mortgage might end up being worth more than your home.

What's the difference between Real Time Ratings and comparison rates?

A comparison rate calculates the cost of a $150,000 loan over 25 years. While a comparison rate is a good industry benchmark, it doesn’t consider your specific lending requirements.

Real Time RatingsTM factors in essential information like your loan size, your loan-to-value ratio (LVR), whether you want an offset account and whether you are an investor or an owner-occupier.

Will I have to pay lenders' mortgage insurance twice if I refinance?

If your deposit was less than 20 per cent of your property’s value when you took out your original loan, you may have paid lenders’ mortgage insurance (LMI) to cover the lender against the risk that you may default on your repayments. 

If you refinance to a new home loan, but still don’t have enough deposit and/or equity to provide 20 per cent security, you’ll need to pay for the lender’s LMI a second time. This could potentially add thousands or tens of thousands of dollars in upfront costs to your mortgage, so it’s important to consider whether the financial benefits of refinancing may be worth these costs.

What is a guarantor?

A guarantor is someone who provides a legally binding promise that they will pay off a mortgage if the principal borrower fails to do so.

Often, guarantors are parents in a solid financial position, while the principal borrower is a child in a weaker financial position who is struggling to enter the property market.

Lenders usually regard borrowers as less risky when they have a guarantor – and therefore may charge lower interest rates or even approve mortgages they would have otherwise rejected.

However, if the borrower falls behind on their repayments, the lender might chase the guarantor for payment. In some circumstances, the lender might even seize and sell the guarantor’s property to recoup their money.

What is breach of contract?

A failure to follow all or part of a contract or breaking the conditions of a contract without any legal excuse. A breach of contract can be material, minor, actual or anticipatory, depending on the severity of the breaches and their material impact.

What happens when you default on your mortgage?

A mortgage default occurs when you are 90 days or more behind on your mortgage repayments. Late repayments will often incur a late fee on top of the amount owed which will continue to gather interest along with the remaining principal amount.

If you do default on a mortgage repayment you should try and catch up in next month’s payment. If this isn’t possible, and missing payments is going to become a regular issue, you need to contact your lender as soon as possible to organise an alternative payment schedule and discuss further options.

You may also want to talk to a financial counsellor. 

How often is your data updated?

We work closely with lenders to get updates as quick as possible, with updates made the same day wherever possible.

Mortgage Calculator, Repayment Type

Will you pay off the amount you borrowed + interest or just the interest for a period?

Remaining loan term

The length of time it will take to pay off your current home loan, based on the currently-entered mortgage balance, monthly repayment and interest rate.