Haggling Bank for Better Rate - Unable to Refinance

itslittfam on 09/12/2022 - 16:49
Last edited 09/12/2022 - 17:15 by 1 other user

Hi all,

Wanted to get some advice on a tricky situation for my parents. They refinanced 3 years ago to Westpac with a rate (competitive at the time) but now well above market rates (~1% above what they offer new customers now).

The issue is their salary has dropped over the years due to working part time now and so with the rate rises - servicing is now pretty much terrible.

Have tried haggling with the bank for a better rate but obviously they wouldn't budge, and due to servicing - refinancing out to another bank is out of the question.

My question is has anyone tried to send a discharge authority form to the bank to just see if the Retention team gets activated so you can negotiate a better rate (I've heard the only time the bank will negotiate is when the retention team gets activated?) Even though there is no other bank to take on the security from the other end, is there any flaws/risk to this?

Or is there a better way going about it and getting a better rate?

Financial Home Loan Westpac

Comments

  • jlv on 09/12/2022 - 16:57

    If they refinanced 3 years ago and surely they didn't fix beyond 4… this should be back to variable in a few months right?

    • itslittfam on 09/12/2022 - 17:22

      Sorry should have clarified - they refinanced to variable 3 years ago and never fixed their rate (poor oversight i know)

      • jlv on 09/12/2022 - 17:38

        Got it. I reckon a strong threat to discharge and yeah.. if variable the world SHOULD be your oyster. However I do second what @Drakesy said… if they are struggling… maybe bite the bullet and downsize.

        • jlv on 09/12/2022 - 18:18

          Gotta love getting downvoted!

  • vinni9284 on 09/12/2022 - 17:04
    +1

    Try to see if Westpac can change the duration of the current loan to longer hence the repayments will be less. Then adjust if needed. They should at least try to assist.

    • Mechz on 09/12/2022 - 19:35

      Banks love this one trick.

      • vinni9284 on 09/12/2022 - 20:53

        Yep. Many people refinance without the knowledge of restarting their loan duration to 30 years again. The interest rate and monthly payments are the only focus

  • AndyC1 on 09/12/2022 - 17:14
    +5

    When speaking with banks do NOT let them know there is an issue with paying the debt.

    Second when you call let them know "you will be moving, unless they make the rate comparable to the rest of the lenders, which is xyz%:" You need to get a list of lenders and what their rats are so you can say what lenders have what rates.

    Be aware that rates are rising and changing every time the RBA raises the cash rate.

  • Drakesy on 09/12/2022 - 17:30
    +5

    Welcome to the problem that half of Australia's investors are going through as we speak.

    Unfortunately they know they have them over a barrell, maybe look into a mortgage advisor. TBH though if your serviceability is dropping rapidly they really should look into downsizing/selling.

    • Ghost47 on 09/12/2022 - 17:36
      +2

      TBH though if your serviceability is dropping rapidly they really should look into downsizing/selling.

      They’ll go without food and water before doing this.

      • Drakesy on 09/12/2022 - 17:46
        +1

        Pretty much everyone in Sydney atm.

    • itslittfam on 09/12/2022 - 17:38

      Sounds like it - The thing is they have enough cash to support themselves but what they are lacking is servicability through salary and they're not looking to sell down any assets in the short term.

      • Drakesy on 09/12/2022 - 17:47
        +2

        Then put the cash into the mortgage and crush it?

        Else take the opportunity to reduce it by downsizing. No matter how you look at it, you still owe the bank the money.

      • Typical16-bitEnjoyer on 09/12/2022 - 22:43
        +1

        they're not looking to sell down any assets in the short term.

        They may not want to, but this is exactly what the rate rises are trying to achieve.

  • megaclix on 09/12/2022 - 17:48
    +1

    I tried with my bank a few times for them to reduce the rate, and it was either a No, or a tiny decline (around pointless level, but you may as well take it anyway).

    I even did the request for the discharge a few times, but that didn't trigger anything. What I 'think' finally got them to reduce the rate significantly, to around the best rates I have seen for the bank on forums, was to actually apply to refinance. I went through all of it, but they made it hard at the last hurdle - wanted me to drive together with partner to one of their branches with a JP, but pretty much mid-week. No digital signatures.

    Then, I did finally get success with my original bank. After checking my credit score record recently, I noted the other application was on my record (it includes the amount - so obvious it was for a refinance). It did make me think if that was the magic dust that was needed.

    Still, your parents will still need an application somewhere to progress to a level where the credit record ping happens.

    Anyone else have a similar experience?

  • Sweet3st on 09/12/2022 - 18:23

    Interested in this too. I can show serviceability through earnings but the issue is the term; paid off at 78! Accountant advice to stay put. I’ve rung twice and had small reductions. Westpac too and rate is not competitive.

  • spal on 09/12/2022 - 18:28

    Have they spoken with the lending manager. Usually, they can get some discount on the rates. Westpac dropped my HL rates to 4.59 (does not include the December increase) just by talking to the lending manager. They have suggested that if I want cashback that I should refinance with another lender, and once the cashback hits the bank account to come back to Westpac as a new customer and get another cashback from them, plus lower rates. Although, I declined being unethical. Looking to move now.

  • Typical16-bitEnjoyer on 09/12/2022 - 19:14
    +1

    Westpac don't give a shit atm. You're SOOL. Hit up retentions again with a written offer from a competitor is all you can do.

  • Wilson Heroes HL on 09/12/2022 - 19:46
    +1

    Hey OP

    I'm mortgage broker here, next time you call Westpac, see if you can ask to speak with the retention team directly when talking with the customer service team.

    If you're able to get through to the retention team, tell them you're planning to leave to another bank (enter other banks deals, ANZ or ubank) and see if they are willing to match.

    Good luck

  • dcep on 09/12/2022 - 20:45

    Did they refinance to Westpac 3 years ago and dealt with the bank direct, without going through broker ?
    If they done it through a broker, then might be worth a shot to get in touch him/her again.

    I'm not sure how effective is a mortgage broker, or whether you could get through to the retention team yourself,
    But from my experience in the past 3 years of pre-rate hike era, whenever RBA cut rates and my bank did nothing, I would ask my broker for rate review and he would respond saying the bank refused, then i would ask him to try again citing some bullshit about loyalty/refinance/retention and i get my rate cuts eventually every single time.

    I did this just so my rate would stay the same as what the bank is offering to new borrower at every single point of time, on the way down and on the way up later.
    So even after RBA hiked 3% in total till now and my bank followed through automatically passing on each and every one of them, i'm now at 4.65% , still with the same lender as 5 years ago, never refinanced.

    Still, on hindsight, we all should of fixed it at 2% when RBA said no rate hike till 2024.

  • Mcuser on 10/12/2022 - 09:04
    -2

    it's not Foxtel, ringing up and threatening to cancel is not going to get you a discount lol

    • Aureus on 10/12/2022 - 11:27
      +2

      You are wrong.

      • Mcuser on 10/12/2022 - 11:33
        -2

        you are wrong

        • cheekymonkey97 on 10/12/2022 - 12:05
          +2

          No, YOU are wrong. It worked for me and got me a rate that multiple other banks weren't willing to match.

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