Newcastle Living Magazine

Five reasons you may be able to get a lower interest rate

With the cash rate increasing by over 4 percentage points since the start of 2022, many households have felt the pinch of rising interest rates. On top of that, many fixed-rate loans are due to expire in the second half of this year, which could double (or more) the amount of interest those households pay in interest.

If this is you, did you know you might be able to get a lower interest rate? There are a number of things that lenders look at when considering your interest rate. If these have changed since you took out your home loan, it is possible you could get a more competitive interest rate.

Whether your loan is a variable rate or your fixed rate is due to expire, speak to our team to see if we can help negotiate a better interest rate with your current lender or another.

Some reasons you may be able to get a better interest rate include:

1 / You’ve been meeting or exceeding your repayments

Not only does this show the lender you are a reliable borrower, but if you are paying principal and interest, it will also bring your Loan to Value Ratio (LVR) down (the ratio of how much of your home you own vs the loan). A lower LVR could get you a more competitive rate.

2 / Your property has increased in value

If your property has increased in value enough, your Loan to Value Ratio (LVR) could be in a lower tier to qualify you for a lower interest rate.

3 / You’ve cleaned your credit file

Improving your credit report could build a stronger case for a better interest rate. You could do this by meeting repayments on time, closing any old transaction accounts that could be charging fees, reporting any errors in your credit file or time passing since any damaging credit problems.

4 / You’ve had a pay rise or gained full-time employment

If your employment has changed to be more permanent or you have received a pay rise, you could look more favourable to a lender.