When it comes time to re-fix your mortgage interest rate, keep this in mind: The rate the bank is publicly advertising, isn't usually the best possible rate you can get.
Banks want you to take the advertised rate. But sometimes, if you are assertive and keep asking, you'll be able to secure a better deal. It's worth the effort too. Even a small change, like reducing your average interest rate by 0.25% or 0.5% can save you tens of thousands of dollars over the term of your mortgage. Especially when you own multiple properties.
Plus it just feels good to get a win!
Here are some tips and scripts to help you secure a discount next time you re-fix your mortgage:
Always speak to a real person. Never just take the rate they send you in the post or the automated rate you see in your internet banking system. Call your bank and speak to someone on the home loan team. Don't be scared of being stuck on hold. Make the call when you have 20 - 30 minutes to spare.
Check the 'advertised' rates first. Go to your bank's website and find out what rates they have available. This is so you know what rate you are trying to beat. Also, check what other banks are offering so you can use that as leverage if they have lower advertised rates than your bank.
Once you get through to a human, start the phone call the right way, with a script like: "I'm calling to re-fix my mortgage. Who do I need to speak with to secure the best possible rate?".
Once you get put through to someone, ask, "What is your absolute best possible rate?". Once they respond, if you're keen to push for more, then it's time to plug your positives. Try this script: "Look, I have been a loyal customer for X years. I've never missed a mortgage payment. I have good equity in my home." (Note: If you can't say all 3 of those, just use the points you can). "Every year we go through this and every year I keep asking until you offer me the best rate. So can we skip all the usual rigmarole and get this sorted? Who do I need to speak with to get a better rate?"
Usually, at this point, you will be put through to a supervisor or manager. That's a good sign. Keep plugging your strong points (customer for X years, never missed a payment, strong equity etc). Maybe you have your business banking with them, or would consider moving it across? Use whatever leverage you can. This is also a good time to quote other bank's rates if they are lower and stress that you are open to moving banks if you need to.
Note: If you don't have decent equity then you may find it hard to negotiate a better-than-advertised rate. If you find yourself in this position, you could look to increase your equity by improving your properties and getting them re-valued.
Whatever you do, don't just take the first rate they offer you. Keep asking and keep pushing for a better deal. If you ask three times and walk away without a discount, then at least you tried and can feel good about giving it a shot.