November 5, 2010
More customers are using their powers of persuasion for a better deal on their home loans, but is it really paying off?
According to a survey by Choice, out of 2170 people surveyed, one-third of customers with home loans asked their financial institution for reduced rates and to their surprise most of them got what they asked for.
Nearly 40 percent who convinced their bank to reduce their interest rate obtained 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 percentage points and one in 10 received between 1 to 2 percentage points off.
What if this method doesn’t work?
The survey also showed that 41 percent of those who asked for a better deal did not receive any discount. So if you have asked your bank nicely and they won’t budge but you know there are better deals that you could be missing out on consider moving your business elsewhere. Start by comparing home loans online to find one with a lower rate.
But is haggling really the most effect way to get the best deal around? At the end of the day, while negotiating may work for some, you may find that you could get a much lower rate by going elsewhere. If you are not happy with your current lender, switch loans by comparing home loans online, you may be surprised.
Put your negotiating skills to good use and try haggling
Here are some tips on how you may be able to better negotiate with your lender:
- Shop around and compare home loans online to see what other institutions are offering. You can take this information to your lender as proof to show them what is around.
- Don’t only ask for a reduction to your interest rate but also ask your lender if they can do you a better deal on fees and features.
- If you tell your lender that you will to take your business elsewhere, don’t say it if you don’t mean it because depending on the outcome, you may have to do this.
Before you make the switch, however, be sure to find out all of the fees and charges involved to not only exit your existing loan but setup the new one. Do all the calculations and work out if you will save more by making the switch.