Based on a national survey by finder.com.au, 82% of borrowers who negotiated for a better rate on their mortgage were granted a rate reduction. This translates to about eight of 10 borrowers getting a preferred interest rate.
This is perhaps disheartening to the 65% of the 2,033 survey respondents who said they did not ask for a discount on their loans.
The survey also showed that 18% looked for another financial institution to get a discounted rate.
Borrowers could save up to $8,000 on their mortgage with a negotiated discount of just 0.10% deducted from the average standard variable rate of 4.93% for a $360,100 home loan.
Millennials were the likeliest group to negotiate a better deal, with 44% from this bracket asking for one, and 68% getting the discount. Equally successful in getting lower interest rates are the baby boomers, with 92% getting a cheaper rate. 9% of Gen X respondents changed lenders for a better deal.
Survey participants from South Australia registered a 57% willingness to ask for a better deal or switch financial institutions. Respondents from Tasmania had a 95% success rate in brokering a mortgage discount while New South Wales’ participants registered the lowest success rate at 73%.
The Reserve Bank of Australia cut the official cash rate to a record low 1.50% earlier this August but many lending institutions hesitated in passing on the full 25 basis point cut to borrowers.
Collections: Mortgage News