Mortgage holders urged to negotiate better deals this Christmas

With an interest rate cut from the Reserve Bank of Australia (RBA) unlikely until at least February next year, mortgage holders struggling with home loan repayments are being advised to ask their bank for some festive season relief, according to brokerage Bell Partners Finance.

Bell Partners Finance managing director, Mark Stevenson, said that borrowers seeking interest rate reductions or other financial assistance could receive a surprise this Christmas if they take action now.

“If you have been a good borrower all year and maintained mortgage payments and a positive credit score, your lender might reward you with a better deal on your home loan this Christmas,” Stevenson said.

“There is no danger asking your lender if they can help or engaging an expert finance broker to do it for you.”

Stevenson said that while most lenders aren’t likely to offer a surprise Christmas gift, borrowers will need to actively ask for a better deal.

He said that enlisting the help of a broker could be advantageous, as brokers have access to multiple lenders, can negotiate on behalf of clients, and help secure better loan terms and rates.

Before approaching a bank, Stevenson said that borrowers should have been model home loan customers to support their request for a lower interest rate or improved terms.

“Other things that will support your claim are making principal and interest repayments rather than interest-only, stable employment, and a good credit history,” he said.

Stevenson also recommended that borrowers reduce discretionary spending and pay down credit card debts before seeking a better deal.

“Finalise any buy now/pay later type facilities and pay out and close any shorter-term finance facilities such as car loans and personal loans,” he said.

As the festive season approaches, home owners are encouraged to take the initiative and ask their lender for a better deal, as this could provide some much-needed relief before the new year.

The RBA is set to meet for its next monetary policy meeting on 17–18 February 2025, although most bank economists (barring CBA) do not see a rate cut until May 2025 at the earliest.

The cash rate was held at 4.35 per cent at the December meeting. The official cash rate has been at this level for over a year now since the last hike in November 2023.

[RELATED: Economists observe dovish tilt in RBA’s stance]

Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.