How to get the best bank deal

Even if you only have a few years left to pay out a mortgage or personal loan, switching lenders can save you a considerable amount of money. So, how do you get the best deal?

Do you consider yourself an attractive customer to potential lenders? If you have 20 per cent equity in your home and the income to cover repayments, then you’re in the driving seat when it comes to negotiating a better deal on your borrowing. But getting the best deal is not only about securing the best interest rate. Before you go shopping for a new loan, consider the following:

1. Does your loan ‘fit’?

If you’ve had your loan for a few years, chances are it may no longer suit your needs. Being able to make extra repayments, make your repayments more frequently or offset any savings you have, can considerably reduce the term of your mortgage. Understanding which features you need your mortgage to have will help you compare products effectively.

2. What fees can you save?

With the ban on exit fees on new loans, fewer lenders are offering to waive the upfront costs such as application fees and valuation fees, as they can no longer recoup this money if you subsequently decide to move again. However, lenders are very keen to have your business, so negotiate hard on these fees. And don’t forget about ongoing costs such as annual fees and account keeping fees. Ask to have these reduced, if not waived altogether.