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  • FIRST POST
    • MSE Martin
    • By MSE Martin 7th Jul 09, 7:18 PM
    • 8,115Posts
    • 42,285Thanks
    MSE Martin
    Haggle down the cost of your existing mortgage
    • #1
    • 7th Jul 09, 7:18 PM
    Haggle down the cost of your existing mortgage 7th Jul 09 at 7:18 PM
    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 itís UNLIKELY to work for most, yet there's no harm trying.


    What to do...
    • Check your current contract. Don't assume youíre 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. ďIíve been a loyal customer for years, but my rate's way above everyone else's, what can you do to help?Ē
    • Use the 'should I ditch my fix?' calculator. If your lender wonít let you move penalty free, and youíre 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...
    • Donít lock in when thereís 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.
    • Donít 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.
    • Donít 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 youíre 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.


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    Last edited by MSE Martin; 08-07-2009 at 5:36 PM.
    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.

    Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.

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Page 1
    • Gorgeous George
    • By Gorgeous George 7th Jul 09, 8:31 PM
    • 7,797 Posts
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    Gorgeous George
    • #2
    • 7th Jul 09, 8:31 PM
    • #2
    • 7th Jul 09, 8:31 PM
    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.

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
    • Kavanne
    • By Kavanne 8th Jul 09, 6:56 AM
    • 5,014 Posts
    • 2,551 Thanks
    Kavanne
    • #3
    • 8th Jul 09, 6:56 AM
    • #3
    • 8th Jul 09, 6:56 AM
    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
    Kavanne
    Nuns! Nuns! Reverse!

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

    • PeteW
    • By PeteW 8th Jul 09, 7:07 AM
    • 1,176 Posts
    • 1,808 Thanks
    PeteW
    • #4
    • 8th Jul 09, 7:07 AM
    • #4
    • 8th Jul 09, 7:07 AM
    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
    • #5
    • 8th Jul 09, 7:15 AM
    • #5
    • 8th Jul 09, 7:15 AM
    Would of been useful if Martin could have said what bank the original haggler was with.... anyone tried HSBC yet?
    • gener8or
    • By gener8or 8th Jul 09, 7:49 AM
    • 112 Posts
    • 19 Thanks
    gener8or
    • #6
    • 8th Jul 09, 7:49 AM
    • #6
    • 8th Jul 09, 7:49 AM
    Do you think this will work with Halifax, currently locked in at 6.09%
  • _Andy_
    • #7
    • 8th Jul 09, 8:05 AM
    • #7
    • 8th Jul 09, 8:05 AM
    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
    • By gener8or 8th Jul 09, 8:37 AM
    • 112 Posts
    • 19 Thanks
    gener8or
    • #8
    • 8th Jul 09, 8:37 AM
    • #8
    • 8th Jul 09, 8:37 AM
    Do you think this will work with Halifax, currently locked in at 6.09%
    Originally posted by gener8or
    They didn't want to know apart from ER charges
  • _Andy_
    • #9
    • 8th Jul 09, 8:49 AM
    • #9
    • 8th Jul 09, 8:49 AM
    They didn't want to know apart from ER charges
    Originally posted by gener8or
    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
    • By special_k83 8th Jul 09, 9:18 AM
    • 54 Posts
    • 48 Thanks
    special_k83
    I'd like to know if anyone has had any success with this...I am intrigued.
    • dunstonh
    • By dunstonh 8th Jul 09, 9:20 AM
    • 98,317 Posts
    • 66,571 Thanks
    dunstonh
    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). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • payless
    • By payless 8th Jul 09, 9:25 AM
    • 6,588 Posts
    • 2,343 Thanks
    payless

    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.
    Originally posted by dunstonh
    My thoughts exactly - but just read the "fuller" article- basically as above but with this at start

    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 itís UNLIKELY to work for most, yet there's no harm trying.
    now I do wonder why a lender would offer this ???, unless perhaps locking in for a longer time ( when close to end of existing deal anyway ) and/or charging the ERC ( capitialised to make the payments look cheaper)

    Think if we take the comments seriously we need more info.
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • Russell231160
    Seemed like a good idea, so I attempted this with Northern Rock (UK taxpayers do own this). Not a chance.
    They just kept referring to the ERC should one wish to change the mortgage deal. I guess you take your chances when "locking in" at fixed rates, I have 12 months left at 6.39%, so not as fortunate as some with low % rates or trackers.
    One thing for certain, NR will not retain my business at the end of this.
    • michaels
    • By michaels 8th Jul 09, 1:55 PM
    • 22,419 Posts
    • 103,205 Thanks
    michaels
    I would have thought lenders would be very keen to get people off the very low base rate trackers - after all they must rate their current much higher tracker and fixed deals as being equally profitable so the low rate trackers must be relatively more expensive and thus it would be worth the lender offering a cheaper than new customer rate fix to try to get customers off the low trackers/svrs.
    Cool heads and compromise
  • _Andy_
    Seemed like a good idea, so I attempted this with Northern Rock (UK taxpayers do own this). Not a chance.
    They just kept referring to the ERC should one wish to change the mortgage deal.
    Originally posted by Russell231160
    That will be the one you agreed to then.
    Why shouldn't they refer to it? It's part of your mortgage contract.
  • CandleFan
    To add to possible reasons to haggle/review mortgage - I felt put under a bit of pressure when I remortgaged last year with Halifax (fixed 10 year rate, 5.79%) as they kept stressing - this deal could change and giving deadlines like 'tomorrow by 6pm.' I'm certainly thinking of using this if I try to re-negotiate. I know some will say, that they were only advising me, of the facts, etc. - but you had to be there - i really felt pressured.

    I don't understand why anyone would defend the banks either, it's business & the only person who will look out for you is you! - there is no harm in attempting to re-negotiate even after you have signed up - if you don't ask you don't get! If they say no, fair enough, but at least you will have tried to save yourself some money.
    • Once_bitten
    • By Once_bitten 8th Jul 09, 3:49 PM
    • 70 Posts
    • 34 Thanks
    Once_bitten
    I often think Martin Lewis has created a monster
    • MSE Martin
    • By MSE Martin 8th Jul 09, 5:39 PM
    • 8,115 Posts
    • 42,285 Thanks
    MSE Martin
    I think there's some confusion here...

    I can't see the problem for asking for a reduction in your rate especially as it has been done. There is a problem with being annoyed if it doesn't happen. And i think the note is very plain people must assume that rejection is the likely outcome.

    As for the difference between haggling and asking for a rate reducation - its purely semantic. The point is there's no harm asking if your lender will drop your rate... and this note is to get people to have a go and see if there's a widespread pattern (or simply the one person was a one off).

    Martin
    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.

    Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.

    Debt-Free Wannabee Official Nerd Club: (Honorary) Members number 000
    • payless
    • By payless 8th Jul 09, 6:20 PM
    • 6,588 Posts
    • 2,343 Thanks
    payless
    as per my post I can't see why a lender would offer a new lower rate ( and waive erc) in fact I would be annoyed if state backed lenders were doing it!
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • Wakey2008
    Martin

    Lenders do not drop rates willy nilly, especially when they are finding it difficult to make a profit on rates as it is.

    Yes you can get a new deal if you are not tied in or are willing to pay the erc but lenders do not just stick their finger in the air and come up with a rate just because a customer wants one.

    The person was a one off and may have even confused getting a new deal (because they weren't tied in) and actually haggling.

    As Andy pointed out, lenders do not haggle. I've worked for five of them and while it used to be possible to get a bit of flexibility on fees etc at one time, those times have gone.

    In fact a lot of lenders would rather the customers just leave now rather than give them something else as that way they get their money back.

    This thread proves what I've always thought, Martin you are clearly just a journalist and are not in any form an expert in financial services.
    I am a Mortgage Adviser and Freelance Journalist
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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