Despite The Reserve Bank maintaining the lowest cash rate in Australian history for the 29^th consecutive month, many people throughout Australia are still paying too much in interest. And while a few tenths of a percent might not seem like much, they can seriously inflate the cost of your loan, especially if you’ll be paying over a 25-year period.

However, you’re not helpless against a bad interest rate. You can negotiate for a better situation, helping you save money and reduce how much you spend on your home.

Be Informed

In any negotiation, knowing more than your opponent gives you an advantage. This allows you to cite facts about better deals and let them know that you’re not going to be swindled. To do this, be proactive. Don’t just go on lenders’ websites and look up rates. Instead, go into banks and act as if you’re a new customer so that you can see what alternatives exist. Then, take this to your current lender to see if you can leverage this information into a better rate.

Learn About New Offers

As banks try to grow their business, they often give out special offers to new customers, but they rarely if ever extend these deals to existing customers because there is no real incentive for them to do so. But it shouldn’t be this way, especially because there is currently so much competition in the lending market.

Start by asking your loan manager which deals are available, and if you aren’t happy with the answer, then ask to speak to someone else. They will not want to see you go, and this move can often result in someone “finding” a deal that had been previously overlooked.

Work with a Broker

If these options fail, the next thing you can do is consult a broker. It’s their job to help you find the best rate, taking a lot of the work out of finding a new deal, and also giving you access to information you might not have had on your own. This is often effective because brokers make money when they find you a deal, so it’s in their best interest to find something that satisfies you.

Get Ready to Leave

All of the things we’ve discussed up until now assume that you will negotiate a new rate with your current lender, but if this isn’t working, then don’t be afraid to leave and refinance with a new bank. This process is painful to go through, but if it results in savings—something that can come from even just a 0.2 per cent reduction in rate—then it’s worth it. Plus, if you threaten to leave, that might be enough to encourage your current lender to act.

Stay Vigilant

Never assume you’re getting the best rate. Set reminders in your calendar to repeat this process every year. If you’re paying your loan on-time and are on track to pay it back in full, lenders will work with you. But it will often be your job to initiate this process of saving money.