How to negotiate a better deal on your home loan

Whether you have an existing loan or you're thinking of refinancing, why not negotiate with your current lender?

negotiate with your current lenderThe Australian home loan market is highly saturated which means that lenders are often willing to offer you discounted rates and favourable terms in order to remain competitive and to retain your business.

As a customer, this means you have increased negotiating power to reason with your lender to get better terms for your mortgage.

Here's some advice about how you can negotiate with your lender.

How to negotiate your way to a better mortgage

Do your research

Researching the local property market gives you an upper hand when it comes to negotiating with your lender. Get to know the property market by speaking to local mortgage brokers and viewing similar property listings in the area so you have an idea of what your property is worth.

Learn more about what drives property price growth, such as access to public transport hubs or proximity to public amenities. Consider the positive aspects of the property such as the structural integrity or kerb appeal so you can build a case about the selling points (and value) of your asset.

It's also a good idea to take a look around to see what interest rates your bank is currently offering to new customers, as well as the rates that are available from other lenders. Not only will this help you work out if you’re getting a good deal, but it will also strengthen your argument when it comes time to talk to your bank.

Look below to get an idea of the current rates right now, or view more in our home loan comparison guide.

Some of today's interest rates

Rates last updated August 18th, 2018
$
Loan purpose
Offset account
Loan type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.59%
3.59%
$0
$0 p.a.
80%
Special discounted interest rate
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.
3.64%
3.66%
$0
$0 p.a.
80%
Competitive interest rate and limited fees
A simple mortgage with a competitive interest rate and no application or monthly fees. Borrow up to $2 million from a convenient online lender.
3.64%
3.65%
$0
$0 p.a.
80%
Get approved faster with a speedy online application
Low interest rate and limited fees. Add a 100% offset account for $10 a month.
3.68%
3.82%
$0
$10 monthly ($120 p.a.)
80%
Earn Velocity Frequent Flyer Points with this mortgage to spend on flights and more (subject to eligibility requirements). Redraw facility available on this variable rate home loan. Competitive interest rate.
3.69%
4.11%
$0
$395 p.a.
80%
Save on interest with a 100% offset account
Unlock a range of savings with this competitive package home loan offer. Offset account and redraw facility included.
3.74%
3.74%
$0
$0 p.a.
80%
A basic owner-occupier home loan with a low variable rate that requires a 20% deposit.
3.70%
3.70%
$0
$0 p.a.
70%
You need a 30% deposit to get this mortgage
Get a discount for keeping your LVR at 70% or below with this innovative online lender.
3.54%
3.59%
$0
$0 p.a.
80%
$900 cashback offer on settlement
Get a competitive rate, save on fees and access a 100% offset account plus redraw facility.
3.64%
3.64%
$0
$0 p.a.
70%
A low interest rate home loan with no application or ongoing fees.
3.64%
3.78%
$0
$10 monthly ($120 p.a.)
80%
Earn thousands of Velocity Frequent Flyer Points on your mortgage (subject to eligibility requirements). Plus, access a 100% offset account to save on interest.
3.84%
3.84%
$0
$0 p.a.
80%
Low fee online mortgage
Pay no application or ongoing fees and get access to a free redraw facility with this innovative online lender.
3.72%
4.10%
$0
$395 p.a.
80%
100% offset account plus package discounts
New borrowers or refinancers from another lender get a discounted rate with this package loan.
3.64%
3.68%
$0
$0 p.a.
80%
A competitive interest rate for first home buyers that keeps fees low. You will need a 20% deposit and can borrow up to 500000.
3.88%
4.40%
$0
$395 p.a.
90%
Lock in a very competitive 2 year rate and get package discounts on your credit card and offset account.
3.49%
4.57%
$0
$395 p.a.
90%
Save on interest with a 100% offset account
Loans over $150k get a discount off an already low fixed rate. Available for NSW, QLD and ACT residents only.
3.75%
3.75%
$0
$0 p.a.
70%
This sharp rate product requires a 30% deposit
Pay no application or ongoing fees and get a flexible loan with the ability to split up to 6 times.
3.98%
4.41%
$0
$395 p.a.
90%
Take advantage of a low 3 year fixed rate, 40% offset account and no application fee.
3.65%
3.66%
$0
$0 p.a.
80%
Sharp interest rate and low fees
This special rate mortgage has no ongoing fees and offers flexible repayments. Save $595 in establishment fees before 30 September.
3.64%
3.64%
$0
$0 p.a.
70%
A basic variable home loan that offers a competitive interest rate with no application fees and no ongoing fees.
3.70%
4.13%
$0
$395 p.a.
90%
Get this loan with a 10% deposit
Package your loan with an eligible credit card for discounts on rates and fees, and get a 100% offset account.
3.68%
3.70%
$0
$0 p.a.
80%
Get a low rate and save on fees
This loan offers a competitive variable rate and a 100% offset account to help save you on interest repayments.
3.65%
3.66%
$0
$0 p.a.
90%
Competitive interest rate and low fees. Available with a 10% deposit. Partial offset account attached (offset up to $15,000).
3.64%
3.79%
$0
$10 monthly ($120 p.a.)
70%
100% offset account and a competitive rate
Low rate, low fee loan for owner-occupiers. You will need a 30% deposit to get this mortgage.
3.64%
3.79%
$0
$0 p.a.
80%
Fast online application
Apply online for this fixed rate, low-fee loan with redraw facilities and an optional offset account.
3.72%
3.74%
$0
$0 p.a.
80%
100% offset account and a 10% deposit option
Save on interest by taking advantage of a 100% offset account along with no ongoing fees or application fees.
3.84%
3.82%
$0
$0 p.a.
80%
A fixed rate loan with free redraws, few ongoing fees. Apply online with a fast approval process.
3.85%
3.85%
$0
$0 p.a.
80%
Flexible, low fee mortgage
Pay no application and ongoing fees with Macquarie Bank Basic Home Loan. Split and redraw facilities included.
3.79%
3.79%
$0
$0 p.a.
80%
Minimal fees and a 100% offset account
Access an offset account and pay no application or ongoing fees on this special variable rate for owner-occupiers.
3.59%
4.74%
$0
$395 p.a.
90%
Get this package loan with a 10% deposit
Enjoy a competitive rate with no application fee for this package loan.
3.74%
3.74%
$0
$0 p.a.
110%
Borrow up to 110% with a guarantor
Pay no deposit or LMI and get a discounted rate with this family pledge loan. Requires a family member to act as guarantor. NSW, Qld and ACT only.
3.74%
3.79%
$600
$0 p.a.
80%
Low interest rate for new customers
Family guarantee option available. Enjoy flexible repayments and a low minimum loan amount.
3.76%
4.15%
$0
$395 p.a.
90%
Discount special offer with a 100% offset account
A high maximum LVR home loan with redraw facility and additional payments. Get this mortgage with a 10% deposit.
3.72%
4.11%
$0
$349 p.a.
90%
10% deposit option available
Package your loan with other AMP products and save on rates and fees.
3.62%
4.49%
$0
$0 p.a.
80%
Get a competitive rate and avoid ongoing fees. This loan is only available to current and former employees of eligible Queensland government organisations.
3.71%
3.71%
$0
$0 p.a.
70%
A variable rate home loan that has a lot of flexible features. This loan has a 100% offset account.
3.64%
3.69%
$600
$0 p.a.
80%
Low fees and low interest rate
A competitive variable rate for borrowers with a 20% deposit or more. Guarantor option available.
3.59%
4.14%
$395
$0 p.a.
80%
Competitive interest rate
A one year fixed rate offer with no ongoing bank fees.
3.97%
3.99%
$0
$0 p.a.
80%
Package your owner occupied loan with investment loan and receive a discounted investment rate. 100% offset account included.
4.04%
4.07%
$0
$0 p.a.
90%
Get this loan with a 10% deposit
For a limited time, pay no application or settlement fees. You can also take advantage of a free redraw facility.
3.99%
4.44%
$395
$0 p.a.
80%
Pay no ongoing fees on this investment loan fixed for 3 years.
3.89%
3.94%
$0
$0 p.a.
90%
Available with a 10% deposit
Borrow up to 90% of the value of the property you're buying, and pay no application fee.
3.70%
3.90%
$0
$0 p.a.
70%
Requires a 30% deposit
Enjoy all the benefits of the Basic Home Loan and take advantage of an offset account.
3.75%
4.00%
$0
$248 p.a.
70%
100% offset account included
Borrowers with a 30% deposit can get this competitive rate.
3.99%
5.17%
$600
$0 p.a.
90%
Available with a 10% deposit
Competitive rates for fixed for 3 years with redraw facility.
3.59%
3.99%
$600
$395 p.a.
95%
Get interest rate discounts and waived fees on this package loan with a 100% offset account.
3.99%
3.99%
$0
$0 p.a.
70%
Save on fees with this investor mortgage
Investors with a 30% deposit can get this low rate loan to fund their property portfolio.
3.91%
3.92%
$0
$0 p.a.
80%
Add an offset account for $10 a month
Investors can go from application to approval in as little as 20 minutes with this innovative online lender.
3.81%
3.81%
$0
$0 p.a.
80%
A home loan with a competitive rate and plenty of handy features. This product comes with a 100% offset account.
3.74%
4.01%
$395
$0 p.a.
80%
Lock in a low rate for 3 years
A competitive fixed interest rate product with no ongoing bank fees.
4.31%
3.95%
$0
$0 p.a.
80%
A variable interest-only loan for investors. Fast application, low fees, optional offset account. 100% online lender.
4.29%
4.31%
$0
$0 p.a.
80%
Flexible, low fee mortgage
Investors will pay no application or ongoing fees for this interest-only loan.
3.74%
3.74%
$0
$0 p.a.
80%
Low rate for people borrowing under $200,000
Pay no application or ongoing fees and get access to a redraw facility and flexible repayment schedule.
3.89%
4.24%
$0
$0 p.a.
80%
Fix your rate and minimise repayments for 2 years with this interest-only investor mortgage.
3.89%
4.94%
$595
$0 p.a.
90%
10% deposit option available
Borrow up to 90% of the value of the property you're buying and pay no application or ongoing fees.
4.18%
4.18%
$0
$0 p.a.
80%
Competitive investment mortgage
Investors get a 100% offset account and pay no application or ongoing fees on this loan from an innovative online lender.
3.99%
4.86%
$0
$0 p.a.
80%
Fix your rate for 2 years
Access a fee-free 100% offset account and pay no application or ongoing fees.
4.29%
4.26%
$0
$0 p.a.
95%
A competitive 3-year fixed rate loan with a high max insured LVR.
4.14%
4.81%
$0
$0 p.a.
80%
No ongoing fees
Pay no application fees and access a fee-free redraw facility with this fixed rate loan.
3.99%
3.99%
$0
$0 p.a.
80%
Special discounted interest rate
Get a discounted, low-fee investor loan from a convenient online lender. 20% deposit required.
4.14%
3.96%
$0
$0 p.a.
80%
Low fee investor mortgage
Investors can go from application to full approval in as little as 20 minutes with this innovative online lender.
4.14%
4.17%
$0
$0 p.a.
80%
Competitive rate for investors
Investors can enjoy flexible repayment options and pay no application or ongoing fees.
3.84%
3.91%
$0
$0 p.a.
80%
Flexible low fee mortgage
Enjoy a fast application process and flexible repayment options with this fixed rate mortgage for investing.
4.24%
4.27%
$0
$0 p.a.
95%
Low deposit loan for investors
Buy a home with just a 5% deposit and get flexible repayment options and a redraw facility.
3.80%
4.95%
$300
$35 monthly ($420 p.a.)
90%
Competitive 1 year fixed rate mortgage.
3.94%
3.92%
$0
$0 p.a.
80%
Lock in your interest rate for 2 years and enjoy flexibility, an optional offset account and a fast online application process.

Compare up to 4 providers

Know the property’s value

Home loans are strongly affected by the property’s value. You can amp up your negotiating leverage by knowing this. Value isn’t just the monetary amount of the property, but it can also include other factors such as location, accessibility and security. If the property has an existing structure, you should also look into its age, previous renovations and repair, and if applicable, any certifications or permits from the local government.

Lenders will be straightforward informing you of their offers, knowing that you can easily say ‘yes’ or ‘no’. They will be hesitant in offering you an unreasonable loan if you've demonstrated that you've done some groundwork. This gives you better leverage to ask for the amount that you want and can afford. Keep in mind that many banks are often reasonable when it comes to negotiating as this can be more affordable to them compared to losing your account to a competitor.

Find out what you can afford to borrow

Your budget is the amount of money that you can afford to make towards each periodic repayment. Most people have a bottom line (the lowest amount possible) and a ceiling (the highest amount they are willing to dish out) when it comes to home loan amounts. Work closely with an accountant and a mortgage broker to help you estimate how much you can afford to borrow.

Use our calculator below to get an idea of your borrowing power.

Don't be afraid to ask

negotiating your rate with your lenderWhether you want a lower interest rate, minimal ongoing fees or different home loan features, many borrowers don't realise that they can simply negotiate for better terms by striking up a conversation with their current lender.

If you don’t ask for a better rate you won’t receive one, so don’t hesitate to ask for a better deal. You have nothing to lose and everything to gain.

Opting for an interest rate that's even just 0.5% lower than your current rate could lead to significant cost savings for the remainder of your loan term.

For instance, if you took out an average mortgage of $471,000 at an average standard variable rate of 5.35%, and negotiated for a lower rate of 4.85%, you could save approximately $144 each month or $1,700 each year.

This would amount to a staggering saving of $52,000 over the life of your loan.

Prove your worth

One of your best weapons when hunting for a better home loan deal is your reputation as a borrower. If you’ve got proof of a long history of making your loan repayments on time — and even making additional repayments if allowed — you’ll have more power at the negotiating table.

Provide loan statements dating as far back as possible as concrete proof that you are the type of customer any lender would love to have.

Demonstrate your loyalty

If you’ve been a loyal customer with your bank for several years, don’t be afraid to play on this connection. Why should a new customer be given a better deal than you, someone who has a long relationship with the institution?

Brooke negotiates a better deal

Brooke has spent the past five years paying off a $400,000 home loan on her apartment in Sydney’s north shore district. When she took out the loan in 2012, it had a variable interest rate of 6.99% p.a.

Currently, Brooke still owes $300,000 and has a remaining loan term of 15 years. An interest rate of 5.00% p.a. applies to her mortgage but Brooke is eager to see if her lender might be willing to lower the rate in order to keep her business. She knows there are loans with better interest rates available on the market to new borrowers, so she phones a lending representative at her bank to ask for a better deal.

Brooke states the reason for her call upfront: she wants a better interest rate on her home loan. At first she receives a non-committal response from the lender, so Brooke calmly provides her reasons for wanting a lower interest rate:

  1. The bank is offering a better deal to new customers. Having done her research, Brooke knows her current bank is offering the same loan with an interest rate of 4.50% p.a.
  2. Other lenders are offering similar loans with lower interest rates. Brooke has compared different home loans on the market to see that other banks are offering much more competitive rates on similar products.
  3. Strong repayment history. She has never missed a home loan repayment and has even made extra repayments towards her debt.
  4. Loyal customer. Brooke has been a customer with the bank for more than 10 years and has a number of other products (credit card, savings account) with the same institution. She doesn’t want to look elsewhere for a better financial solution, but she is willing to switch to another lender if her needs aren’t met.

In response to Brooke’s compelling argument, the lender promises to ‘see what I can do’ and quickly comes back to her with the offer of a 0.50% p.a. reduction in her interest rate. The result is a huge win for Brooke — the reduced interest rate means her monthly repayments will decrease from $2,372.38 to $2,294.98, a saving of more than $75 per month.

Brooke is able to put that extra money into her super account each month as she starts saving for her retirement.

Be ready to switch

Banks would prefer to keep your business rather than entice a new customer, so don’t leave your lender in any doubt about your willingness to switch if needed. It’s important that you are prepared to act if your lender won’t come to the party and offer you a better deal, so make sure you make this clear from the start.

Consider your bank’s perspective

Has your request for a better interest rate been shut down? If so, ask yourself whether there is any good reason why that might be the case. Is there any valid reason why the bank may class you as a high-risk borrower, for example a credit history that is less than perfect? If not, it might be time to look elsewhere.

Use available tools online

Comparison websites such as www.finder.com.au let you compare different kinds of home loan offerings in one go and often at no extra cost. Information is presented as a simple table with all the details that you would need.There are also home loan check tools available online. These sites compare your current loan with other offerings in the market. Some offer online calculators that can determine your payments if the rates increase. It will also help you identify which loans are easier for you in the long run.

To help you check for the best loan, finder.com.au offers a range of calculators for your mortgage, including a switching calculator and a mortgage health check.

Images: ShutterStock

Belinda Punshon

Belinda is a journalist here at finder.com.au. Specialising in the home loans and property sections, she is passionate about helping Australians improve their financial wellbeing.

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Important Information*
UBank UHomeLoan Variable Rate - Discount offer for Owner Occupiers, P&I Borrowing over $200,000

Take advantage of a low-fee mortgage with a special interest rate of just 3.59% p.a. and a 3.59% p.a. comparison rate.

loans.com.au Essentials - Variable (Owner Occupier, P&I)

A competitive interest rate home loan with interest only options. Interest rate 3.64% p.a.
comp rate of 3.66% p.a.

Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤90% ($150K+ Owner Occupier)

Loans over $150k get a discount off an already low fixed rate. Available for NSW, QLD and ACT residents only.

Newcastle Permanent Building Society Premium Plus Package Home Loan - New Customer Offer ($150k+ Owner Occupier, P&I) Discount 1

New borrowers or refinancers from another lender get a discounted rate with this package loan.

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