One way for a borrower to ensure they are getting the best interest rate on a home loan is by asking their lender if they can perform a competitor match. Before approaching a lender about matching the loan terms of a competitor, there are some steps a borrower should do first.
Find the lowest possible interest rate
To convince a lender to match a competitor’s rate, a borrower needs to know what other lenders are offering. Borrowers can use online rate comparison tools to see how their loan terms stack up against those of other major lenders. Another option is to find a mortgage broker. Mortgage brokers have access to loan information that banks and other lenders may not make readily available. Once they have all the data, the borrower can present the information to their current lender.
Show your lender you are serious
Another way to help convince a lender to match a competitor’s rate is by asking a mortgage broker to lodge a pricing request. A pricing request can be used as a bargaining chip to show lenders that the borrower is serious about walking away from them if they are unwilling to match a rate. Most banks and lenders want to keep a borrower’s business, so they are willing to do what is necessary to keep the customer happy.
Be a great borrower
Banks want to lend to borrowers who are low-risk and have good borrowing power. Borrowers can make themselves attractive to lenders by doing the following:
- Have an LVR lower than 80%.
- Have a good credit score and history
- Make regular repayments without missing any or having defaults
- Have steady employment
By following the steps above, a borrower may be able to convince a lender to match a competitor’s interest rate. However, sometimes a lender may not agree. If they don’t, refinancing may be an option.
Mortgage Street is a non-bank lender specialising in the entire mortgage process and can help a borrower find the home loan with the best rates.