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Speaker 1: Welcome to ask if you're in Greed, where we answer

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Speaker 1: questions about business, investing, economics, politics, and more. I'm Sean

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Speaker 1: Aylmer and hello. Michael Thompson, Hello, Sean.

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Speaker 2: Strange things are happening here.

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Speaker 1: It is. It's the other way around Normally, Michael asked

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Speaker 1: the question and I give the answer. But Michael with

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Speaker 1: the wonderful Kenneth Campbell on their podcast how do they

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Speaker 1: afford that? There? He's responding because that podcast itself often

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Speaker 1: talks about this exact question, So I think he's much

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Speaker 1: better place than I am to provide a response. The

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Speaker 1: question is given the cut and interest rates yesterday, how

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Speaker 1: do we get a better mortgage rate? What's the process? Oh?

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Speaker 2: Great question, Thank you Sean. And yes, look Canna Campbell

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Speaker 2: would definitely be the better person to answer this, But

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Speaker 2: without cannor in the studio, I guess it's fallen to

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Speaker 2: me because we actually we did talk about this recently

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Speaker 2: on how do they afford that? Because there is a

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Speaker 2: process that you can go through, and sure it would

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Speaker 2: be good if you were just automatically receiving that new

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Speaker 2: lower rate and that you're at kind of the lowest

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Speaker 2: possible rate for any kind of given bank, but in

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Speaker 2: many cases customers are paying essentially a loyalty tax that

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Speaker 2: if you have been with your bank for a long time,

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Speaker 2: that even if your interest rate does come down, you

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Speaker 2: are still going to be paying higher than perhaps new

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Speaker 2: customers that are coming into the bank in the first place.

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Speaker 2: And so really, and that's because people are not staying

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Speaker 2: on top of it, that you're not checking in every

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Speaker 2: kind of six months to see what new customers are

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Speaker 2: paying and potentially whether you can get a better deal.

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Speaker 2: So there are a few steps that we talk about

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Speaker 2: as to what you would do in this scenario, and

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Speaker 2: it starts with research, which sounds incredibly dull to me,

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Speaker 2: well to me at least, maybe I'm a little bit

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Speaker 2: biased on this, or maybe that's why I pay the

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Speaker 2: loyalty tax because got this allergic reaction to that kind

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Speaker 2: of research. But it is about you start with your

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Speaker 2: interest rate. Check to see what you are actually paying.

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Speaker 2: Because if you went out onto the street and ask

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Speaker 2: ten people, I reckon about eight out of ten wouldn't

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Speaker 2: actually know exactly what interest rate they are paying. Yeah,

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Speaker 2: And so once you know that, then there are a

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Speaker 2: few other things that you can do. You can go

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Speaker 2: to the website for your bank and see what they

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Speaker 2: are offering to new customers, and so you just check

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Speaker 2: with check the new customer rate. Then go to the rivals.

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Speaker 2: Go to the other whether it's big four banks or

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Speaker 2: non bank lenders. Go to a comparison website like MOSO

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Speaker 2: or Finder. There's a bunch of them out there, and

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Speaker 2: go in there and you can just and it is

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Speaker 2: very very easy to see what the other rates are.

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Speaker 2: And you're just taking notes, write down all of these

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Speaker 2: things as you're going check the fine print on those.

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Speaker 2: So if you're seeing a fantastically low rate for another place,

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Speaker 2: check it. It could well be an introductory rate that's

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Speaker 2: only got a very short honeymoon period where it's kind

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Speaker 2: of three months or six months, in which case, okay.

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Speaker 2: The other things you need to put together before you

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Speaker 2: make your call to your bank. How long you've been

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Speaker 2: with your bank, So if you've been there ten years,

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Speaker 2: fifteen years, twenty years, whatever it is, because that kind

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Speaker 2: of thing matters, if you've been a long standing customer,

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Speaker 2: how much you've actually paid off your home loan as well,

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Speaker 2: any black marks against your name, so that you're aware

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Speaker 2: of them and you can prepare to counter those whether

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Speaker 2: you've missed repayments where they've had to chase you up

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Speaker 2: because you've been late on previous occasions, and if you haven't,

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Speaker 2: make sure you mentioned that as well. And also importantly

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Speaker 2: to have the valuation of your house there, of property,

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Speaker 2: whatever it is, and there's a website that kind of

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Speaker 2: talks about a lot on the house dot com dot

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Speaker 2: au where you can just go and it will give

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Speaker 2: you an up to date valuation of your property. All

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Speaker 2: of these bits and pieces. You take all of those in,

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Speaker 2: then you call up your lender and you work through

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Speaker 2: those things one after the other. You establish how long

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Speaker 2: you've been there, what you're paying, how much you've paid off,

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Speaker 2: how much you own in the property, what it's worth now.

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Speaker 2: Why you deserve a rate cut and you don't settle

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Speaker 2: is the other piece of advice is that when they

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Speaker 2: will likely offer you are reduction in your rate, particularly

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Speaker 2: if you're able to point to competitors who are offering

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Speaker 2: a better rate, or just even that they are offering

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Speaker 2: new customers at the same bank a lower rate. But

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Speaker 2: don't settle. Take a day, take a couple of days

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Speaker 2: to think about it and potentially shop around, and then

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Speaker 2: go to and if all of that's too hard. If

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Speaker 2: it is, if you're one of those people that doesn't

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Speaker 2: like these kind of conversations, go to all mortgage broker yep,

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Speaker 2: who are able to help you with this kind of thing.

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Speaker 2: And in the end, chances are just by making that

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Speaker 2: call you can save yourself a whole lot of money.

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Speaker 1: Yeah, my two cents worth on this. And this is

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Speaker 1: a personal view. Is I mean I have a fixed rate,

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Speaker 1: I go fifty to fifty fixed floating Yeah, fixed part

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Speaker 1: comes off in about six weeks, So I need to

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Speaker 1: do all that and then go to my banker and say, hey,

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Speaker 1: what can you do here? Because when my fixed rate

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Speaker 1: comes off and basically double my floating rate mortgage and

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Speaker 1: it's really important to have all that information at hand

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Speaker 1: to get the best deal. Yeah.

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Speaker 2: And the thing is that you end up paying this

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Speaker 2: loyalty tax because you are happy just to sit there

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Speaker 2: and just let it all work through the system on

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Speaker 2: its own. And unfortunately you are not guaranteed to get

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Speaker 2: the best rate unless you actually ask for it.

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Speaker 1: What a great answer, Michael, I think my job has

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Speaker 1: become redundant. You can do the ask fear and greeds

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Speaker 1: from here, on in Well, it.

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Speaker 2: Was very comprehensive aka wordy. I like to take a

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Speaker 2: lot of story.

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Speaker 1: Good Thank you Michael, Thank you Sean. Remember if you've

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Speaker 1: got something you'd like to know, then send through your

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Speaker 1: question on LinkedIn, Instagram, Facebook, or at Fearing Greed dot

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Speaker 1: com dot au. I'm Sean Almer and this is ask

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Speaker 1: Fear and Greed