Interest rates comparison site RateCity is encouraging all home owners to check their loans online after it was revealed some lenders are charging existing customers more for their mortgages than new customers on the same loans.
RateCity research revealed there are ten lenders who openly price loans differently for new customers or new lending.
On a $300,000, 30-year loan securing the cheaper rate could help you save up to $195 a month or $70,144 over the life of the loan.
RateCity money editor Sally Tindall said all mortgage holders should ‘rate check’ their bank at least every couple of months.
“This is a classic case of the loyal consumer getting the raw end of the deal. Bank’s regularly offer cheaper rates to get new business in the door.
“Most people think banks only reduce loans when the official cash rate drops, but that’s not the case. Market forces are always at work and lenders change their rates regularly.
“To say to those loyal customers who’ve been with the same bank for years, you can’t have access to the cheaper rate, is completely unacceptable.
“In a time where banks are trying to rebuild their reputations, rewarding loyalty should be at the heart of what they do.
If you catch your bank out, it’s as simple as phoning them and asking for a discount. You’ll be surprised by how many banks’ drop their rates to keep you happy.
Best of all, in many cases there is no additional paperwork involved.
If your bank doesn’t play ball, it’s time to start shopping around and take your business elsewhere.
Some lenders, like Reduce home loans, even reward customer loyalty. They offer a rate reduction of up to five basis points for mortgage holders who’ve been with them for over 5 years.