Haggle down the cost of your existing mortgage

MSE_Martin Posts: 8,273
First Post First Anniversary Combo Breaker
Money Saving Expert
edited 8 July 2009 at 5:36PM in Mortgages & endowments
Haggle down the cost of your existing mortgage
Cut mortgage costs even if you're locked in?

A MoneySaver recently fed back to me how he asked for a rate reduction on his fixed deal (during the lock-in period), and got around 1% off, that's £80 a month cheaper per £100,000 of mortgage.

There's no way to tell how widespread this is, and it’s UNLIKELY to work for most, yet there's no harm trying.

What to do...
  • Check your current contract. Don't assume you’re automatically locked in; some fixed and discount rate deals are penalty free, meaning you can leave at any time. And those paying standard rates are usually free to move anyway (see the remortgage guide or speak to a whole-of-market broker).
  • Be polite but have an argument ready. If you are locked in, when you call to haggle, check what your lender currently offers new customers, and prepare an argument for why you should get a reduction. E.g. “I’ve been a loyal customer for years, but my rate's way above everyone else's, what can you do to help?”
  • Use the 'should I ditch my fix?' calculator. If your lender won’t let you move penalty free, and you’re on a fixed rate, it's UNLIKELY to be worth ditching, though you can do a rough calculation with the ditch my fix? calculator.
What not to do...
  • Don’t lock in when there’s little time left. Those who get a reduction close to a mortgage deal's end may be missing out on the opportunity to see what better deals are available elsewhere, and thus potentially paying over the odds. See the cheap mortgage finding guide for full info.
  • Don’t forget fees. If you're given any options, always check whether there will be penalty fees for leaving and setting up a new deal, then see whether with those incorporated you'll still save.
  • Don’t think cheaper is always better. If your existing lender offers you a new cheaper rate with a longer lock in you may be trading in short-term gain for long-term pain. It may be better waiting until your deal ends and you’re free to move.
Don't forget to feedback & share info. If you get anywhere, or discover a good technique, please post here to let us know.

Martin Lewis, Money Saving Expert.
Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
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  • Gorgeous_George
    Gorgeous_George Posts: 7,964
    First Anniversary Combo Breaker
    I tried to haggle mine up.

    I'm currently paying 1.24% on a lifetime tracker and asked about mid term fixes. I was only offered the same deals as new borrowers would be offered so I decided to stick with what I have.

    My tip. If mortgage A comes with a £1,000 arrangement fee and mortgage B with a £200 fee, just subtract £800 from the total advance of mortgage B. Probably a rubbish tip but it works for me. :)

    There are 10 types of people in this world. Those who understand binary and those that don't.
  • Kavanne
    Kavanne Posts: 5,093 Forumite
    I am on 1.25% (BOE + 0.75%) tracker and I called my lender to haggle but the lowest rate they would offer me is their standard rates atm which start from 6.3%!! lol
    Nuns! Nuns! Reverse!

    'I do my job, do you do yours?'

  • PeteW
    PeteW Posts: 1,212
    First Post First Anniversary Combo Breaker
    Would be great if people could let us know what lenders they are haggling with. Would certainly be interested to hear if anyone has any success with mine (abbey).
    MORPH3US Posts: 4,906 Forumite
    Would of been useful if Martin could have said what bank the original haggler was with.... anyone tried HSBC yet?
  • gener8or
    gener8or Posts: 163
    First Anniversary Combo Breaker First Post
    Do you think this will work with Halifax, currently locked in at 6.09%
  • _Andy_
    _Andy_ Posts: 11,150 Forumite
    Lenders don't 'haggle' - some lenders do offer certain rates or waive fees for existing customers but you don't 'haggle' on mortgages.
    I can see plenty of people making a fool of themselves on the back of this.
  • gener8or
    gener8or Posts: 163
    First Anniversary Combo Breaker First Post
    gener8or wrote: »
    Do you think this will work with Halifax, currently locked in at 6.09%

    They didn't want to know apart from ER charges
  • _Andy_
    _Andy_ Posts: 11,150 Forumite
    gener8or wrote: »
    They didn't want to know apart from ER charges

    Why would they? You agreed a deal you thought was fair at the time and are now wishing to get out of that contract. There is no commercial sense for them to let you do so.
  • special_k83
    special_k83 Posts: 53 Forumite
    I'd like to know if anyone has had any success with this...I am intrigued.
  • dunstonh
    dunstonh Posts: 115,588
    Name Dropper First Anniversary Combo Breaker First Post
    I have never known a lender haggle on mortgage terms.

    There are a couple of sub prime lenders that are encouraging people to leave at the moment by waiving ERCs and even offering to pay some of the mortgage.

    Some lenders, like Nationwide, even refuse to allow you buy yourself out of the current deal to go onto another with them. They will let you buy yourself out but you have to remortgage instead.

    I would be interested to see which lenders people have had success with. That said, if you read what Martin has posted, its less about haggling but more about reviewing what you have compared to what is available. I'm not sure the thread title really matches the content of the post.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
This discussion has been closed.
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