Secrets to a cheap mortgage deal

Jamie Durie's outside of the box home is on the market.

Demand a better mortgage rate ... Home loan customers are urged to contact lenders. Picture: Thinkstock Source: Getty Images

A NEGOTIATING expert, working undercover, has proven how tens of thousands of dollars can be saved on a mortgage simply by demanding a better deal.

Picking up the phone and haggling to get the best deal possible has resulted in numerous offers including the wavering of fees, huge interest rate reductions and cashback offers.

Property guru and negotiation expert Steve Jovcevski posed as a mystery shopper including a first homebuyer, refinanced and investor and contacted the big four banks to ask for a competitive mortgage deal.

In nearly all scenarios he scored himself a further discount beyond advertised home loans deals.

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The research compiled by comparison website Mozo showed Jovcevski grabbed a huge 1.16 per cent off a standard variable rate loan for a $500,000 mortgage to 4.7 per cent and had a package fee waived.

This could save the customer more than $6,000 in the first 12 months.

Jovcevski also nabbed a 1.21 per cent discount off a variable rate on a $1 million loan bringing it down to 4.67 per cent and had the package fee waived.

This would save a customer more than $12,000 in the first year.

Mozo spokeswoman Kirsty Lamont said there are plenty of bargains to be had if home loan customers push for a better deal.

Ask around ... Mozo spokeswoman Kirsty Lamont said home loan customers should not be afraid to demand a better deal on their mortgage. Source: News Corp Australia Source: News Limited

"We found lenders are offering deep rate discounts and other incentives to those prepared to haggle on their home loan,'' she said.

"When pushed the banks are prepared to offer far better discounts than their standard published package loan discounts.

"But you need to do some hard bargaining to get access to the biggest discounts because they are very much under the table and they are not publicised."

Lamont said they usually won't offer their best deal in the first instance because they want to "boost their profit margins" and she said the onus was on borrowers to "push hard."

Jovcevski said the critical formula of combining "research with haggling" can deliver excellent results for frugal borrowers.

"Often the lender will say they can only give you the best rate if you've put in an application,'' he said.

"You have to be upfront, you don't need to do an application to get the best deal.

"Give them a rate that they can match or do better on because as soon as the lender's pricing department see an actual rate the more likely they are to move."

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Savings will be immense ... Home loan customers, or people with a mortgage, should shop around. Picture: Thinkstock Source: Getty Images

He said sometimes it will take several calls to the same lender to score the best deal.

1300homeloan manager director John Kolenda said the lengths financial institutions will go to in order to give a customer a competitive deal with vary.

"Some won't budge on rates but they may waive the application fee, so you have to make a number of calls to various lenders because they are all aggressively competing,'' he said.

"If your loan to value ratio is lower then you get better a rate, but if you borrow more money you get a better rate.''

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