Lower your home loan rate

The banks and financial institutions aren’t exactly screaming it from the mountaintops, but lowering the interest rate on your home loan really is easier than you think. Just ask and you shall receive.

What you do need to ask for is a ‘Professional Package’ which in the past was offered to doctors, lawyers and accountant types, but are now available to anyone who qualifies as a low risk lender. It works in a similar way to a bundled home phone, internet and mobile deal, whereby rolling your finances into one large banking package with a single bank or financial institution earns you a reward. That can be a discount of 0.5 to 0.7 of a percentage point on the standard variable home loan rate. Free transactions on savings accounts, lower admin fees and money-saving offset accounts to further reduce the loan interest you pay are often part of the package too.

To be eligible for professional packages with the majority of banks or lenders, you must have borrowed at least $150,000. The discount you receive on your interest rate rises as you borrow more. For loans over $500,000, most financial institutions will discount their standard variable rate products by 0.5 percent. An even higher discount can be offered if you have borrowed more.

It may mean you lose the flexibility to seek out the cheapest interest rates on individual products like credit cards, but the overall benefits of having a professional package generally outweigh any of those smaller savings. And with the ongoing unpredictability of interest rates, there’s no better time to start negotiating a better deal with your lender or contacting your mortgage broker.

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