If you do it badly then, yep, I reckon it can.
There’s been a hell of a lot of chatter in recent weeks about going to the bank and asking for a discount on your floating rate. It’s plastered all over this morning’s Herald. It was front page news on the SST a few weeks ago and TV One did a story on it so if you haven’t heard about it by now…
More than that, some of the sentiment has been to go to your bank, tell them you want a discount and threaten them with your departure if they don’t give you what Bernard Hickey says they should.
I’ll repeat what I said about that behaviour a few weeks ago – it’s a bit childish.
Imagine if I said to my wife “If you don’t get me the new Nissan Navara for my birthday I’m divorcing you”. I’d be shown the door pretty smartly.
And once I was out the door would anyone else give me the Navara? There are plenty of borrowers who would not meet another banks lending criteria no matter how wonderful a customer they think they are. So be careful before you play that card because it might backfire.
More than that, the bank already knows that good customers can go anywhere so why rub their noses in it?
I think you’re better to pitch your request against a background of good behaviour and financial strength so think about
- What percentage of your house value your loan is. Under 80% is good. The lower is better.
- What about your income. Is it from a stable and reliable source? Do you have a strong surplus after paying the mortgage and living expenses?
- How’s your track record in terms of loan payments, credit card payments, overdraft limits?
Now you’re starting to talk the banks language and you’re hitting the marks a bank uses to assess the quality of different borrowers. And yes, strong borrowers get the really good deals you read about.
About Campbell Hastie