Discounts on loans greater than $300,000

Most major lenders will offer a discounted interest rate of up to 0.70% off the standard variable home loan rate, starting at borrowings of around $300,000. Officially, discounts start at 0.5% at $300,000, but often your mortgage broker can negotiate a greater interest rate discount on your behalf.

Negotiating interest rates creates the greatest advantage

For every $100,000 you borrow, a 0.1% discount will roughly save you $100 p.a. in interest. A $300,000 loan with an interest rate discount of 0.70% p.a. on a 30 year home loan, will reduce your average annual interest by approximately $1,760. Over the term of your mortgage, this will save you approximately $53,009.

Avoiding upfront fees

When you only have a small deposit and need to keep your funds as free as possible, avoiding the up front fees associated with securing a mortgage can be very useful at the time you need it most. Some lenders have products with very minimal upfront fees and instead offer a deferred establishment fee (DEF). The DEF is only required to be paid if you repay your home loan early (within the first three or four years) and would typically cost you between $700 and $1,000 in that event.

Mortgage counter offers

A good mortgage broker with experience and contacts can be especially useful for receiving and assessing counter-offers from suitable lenders, including your current lender.

Negotiating property purchase price

Once you have a clear understanding of your borrowing capacity and comfort level with repayments, make sure you know how much difference incremental increases in the price you are willing to pay for your property will make to your mortgage repayments

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