Haggling interest rates

[The Dark Knight]

So ive spent the last few weeks haggling with my bank to get cheaper interest rates and I finally got a big discount which they agreed on finally but now with todays predicted interest rate cut will I have to go through the whole process again or will they change it automatically? Thanks in advance

 

[D.T.]

So what rate did you get and with who? Corey got me 4.74 at WBC which is pretty nifty.

I think if bank drops rate (emphasis on bank, not rba), then your rate will reduce by equal amount, assuming you're variable.

 

[Corey Batt]

The rate you negotiated should be the total discount % off their standard variable rate - so you shouldn't need to re-negoatiate.

AKA if the SVR was 5.9% and you negotiated a 1% discount the effective rate is 4.9%. If the rates were then dropped .25% your rate would go down to 4.65%, even if your original discount rate was 0.75% (5.15%).

 

[Peter_Tersteeg]

If you've got a variable interest rate, it should be reduce with the banks decision to adjust their rates.

Most mainstream lenders use a 'Standard Variable Rate'. When you negotiate, you tend to negotiate the amount of the discount from the SVR. You may think you're negotiating for a cheap rate of 4.xx%, but you're really negotiating a discount of y.yy% off the SVR.

If this is the case, then you'll keep the discount and your rate will change as the bank changes the SVR.

 

[The Dark Knight]

So what rate did you get and with who? Corey got me 4.74 at WBC which is pretty nifty.

I think if bank drops rate (emphasis on bank, not rba), then your rate will reduce by equal amount, assuming you're variable.

Hey mate I got 4.79 with all my standard loans and 4.81 on Portfolio ones(aka everyones loved xcoll loans) with STG

 

[The Dark Knight]

Thanks for the replies everyone. Thank god I didn't want to go through that effort again

 

[Jamie M]

So ive spent the last few weeks haggling with my bank to get cheaper interest rates and I finally got a big discount which they agreed on finally but now with todays predicted interest rate cut will I have to go through the whole process again or will they change it automatically? Thanks in advance

Happens automatically.

Cheers

Jamie

 

[RetireRich101]

There were times when RBA cut 0.25, bank passes 0.15 because they say funding cost is high... Bank does this few times to their existing customers, then your discount rate becomes less attractive...
Eventually the average Joe on the street signs up new loan, and is able to negotiate similar or better rate.
Not sure this is strategy that Bank uses to flush out existing/loyalty customer..

 

[joanmc]

DT, may I ask what level of lending got you 1.25 off the SVR? I am with WBC too.