How to beat the banks if your interest rate has increased

How to take advantage when banks are increasing your interest rate

We have been in contact with many of our valued clients recently, in light of their current lenders advising their home or investment loan interest rate has increased. Some lenders have even increased it numerous times over the last 6 months. The focus has been investment loans from the banks, but they have also increased borrowers home loans.

Some of the factors banks are increasing rates include:

  • APRA (governing body for banks) – trying to curb investment lending, therefore the banks have put their investment rates up to detract borrowers from investment loans
  • More capital requirements – the banks need to hold more money aside rather than lending it out, so they need to increase profits of current loans
  • Interest only loans – banks are trying to reduce the amount of interest only loans on their books
  • Profitability – with all these new measures, Banks need to look at other ways to provide profits to their shareholders, therefore if they increase rates, they increase profit margin on a loan

At My Mortgage Freedom, we take the approach in the first instance, if its not necessarily worthwhile to refinance the loan to another lender, but consider other products with the banks (e.g. from variable to fixed) or negotiate on the clients behalf to get a better rate! We have had numerous ‘wins’ for our clients by threatening the bank (in a nice way) either provide a better rate or the client will walk (and refinance).

After we go through the negotiation process and we don’t get the result we are after, we then look at all the other lending options based on the client’s needs and if its worthwhile (by completing a refinance comparison) we will find a lender that suits their needs.

So if you’re a client of ours, get in touch and let us speak with your bank and get a better deal, but if you’re not a client and want some home or investment loan advice, don’t hesitate to reach out and let us see how we can save you money.

Thank you to our valued clients, our efforts have been noticed