Master Builders Financial Services’ clients have been able to renegotiate their mortgage interest rates by allowing their MBFS credit advisor to do this on their behalf.
This is how it works:
• When your broker organised your mortgage, it would have been very competitive at the time.
• Since then, banks have been steadily raising mortgage interest rates, even though the Reserve Bank has kept the cash rate on hold.
• With tighter lending parameters come stricter rules and guidelines on what levels banks are allowed to offer borrowers, e.g. to investors. It’s much easier for the banks to retain their existing clients than acquire new ones.
• Therefore, by providing your broker some updated details on the state of your mortgage – including the current outstanding amount, the value of your home and whether you have missed any payments, your broker can engage your existing bank to request they lower your interest rate.
Why negotiate through your broker and not directly with the bank?
The bank knows it’s in the broker’s interest to move you to a new bank which is more competitive as it benefits the borrower as well as the broker because the broker will get paid a commission. For this reason, the bank will take notice and know that losing your mortgage is a probable outcome.
The bank also knows that the broker knows the details of your loan and already has contingency banks and loans in place in case the bank does not ‘come to the party’.
The banks bet on peoples’ complacency; they know that if they refuse the discount to the consumer, it’s unlikely the person will go through the rigmarole of finding another lender and all the mucking around which is required. But a broker excels at making this process as easy as possible for the consumer – which is why the broker’s call will be taken more seriously.
Why not obtain your loan directly from a bank?
It’s unlikely your bank manager will approve the discount as they already have your business. Go to a reputable broker (like Master Builders Finance) who will attempt to obtain a discount from your existing bank before approaching another.
Please note that this environment is not always available, as banks go through cycles of acquisition and retention.
If you would like more information, call Master Builders Financial Services on 1300 137 539 or (03) 9411 4555.
Please note: This information is general in nature and not to be considered specific advice of any kind as your situation has not been taken into consideration.
P: 1300 137 539 Chocolate Money t/a Master Builders Financial Services
Australian Credit License 387277