How to Earn $6,000 in One Hour

Hey Scott,
 
My wife and I are fiercely trying to pay down our home loan. After trying to negotiate down our rate with our lender last year, we decided it was time to switch to what was, at the time, the best variable rate we could find. Fast-forward a year and there are far better rates ‘out there’, with many lenders offering enticing cash bribes. So my question is: what’s stopping me from refinancing regularly … even yearly? Is there a chance lenders might start rejecting my applications, leaving me in no-man’s land?
 
Tim
 
Hi Tim,

No, I don’t see that happening.
 
I had a Barefooter write to me about what happened when he threatened to leave his bank for a cheaper rate, and the bank called his bluff.
 
Here’s what happened next, in his own words:
 
“ANZ were offering new customers a $4,000 sign-on bonus (and a slightly better rate), so we switched. But then, a few weeks later, I saw that my original bank was offering $3,000 for new customers. Bang! Before you know it, I’m back with my original bank. For about 1–2 hours of paperwork and a few phone calls and emails, we were able to pay $6,000 off our home loan (after fees!).”
 
Nice one!
 
Last month the CEO of ANZ Bank said that the home loan market was the most competitive he’d ever seen, and some banking analysts are suggesting that the discounts and incentives new customers are getting offered at the moment are irrational.
 
Understand this: the banks aren’t flashing the cash to their loyal customers … only those who bother to switch. So the only irrational thing you can do is not spend a few minutes putting your bank under the hammer this weekend.

Scott.