Home Loan Interest Rate Reduction in Palmview

Brokering a New Home Loan Interest Rate for a Palmview Couple

How Loanright Financial Services Helped a Palmview Couple Save $8,200 a Year in Interest

When it comes to home loans, many homeowners assume that the only way to get a better deal is by switching banks. However, at Loanright Financial Services, we believe in leveraging strong relationships with lenders and maintaining an active approach to managing our clients’ finances. This proactive approach was exactly how we helped a couple from Palmview save $8,200 a year in interest payments—without the need to change banks.

Here’s their story and how our team achieved such a significant result for them.

The Original Home Loan Interest Rate Situation

The Palmview couple had initially purchased their property for $670,000, securing a loan with a 95% loan-to-value ratio (LVR). For those unfamiliar with LVR, it’s a key metric used by lenders to assess the risk of a home loan. The higher the LVR, the riskier the loan, which often results in a higher interest rate for the borrower. In this case, the couple’s LVR was high because they were borrowing 95% of the property’s value, meaning they were only able to contribute a 5% deposit at the time of purchase.

This high LVR led to a relatively steep interest rate, making their loan more expensive compared to homeowners with a lower LVR. However, as with many homes in Palmview and other growing areas, the value of their property did not stay stagnant. Over time, the property’s value increased, opening up opportunities for the couple to renegotiate their loan terms.

Recognising the Opportunity

At Loanright Financial Services, our approach goes beyond securing a loan and moving on. We believe in maintaining ongoing relationships with our clients and monitoring their loans regularly to ensure they are getting the best possible deal. This regular review process allows us to identify changes in the market, interest rates, and—critically—changes in the value of the properties we’ve helped finance.

With the Palmview couple, we knew that property prices in their area were on the rise, so we suggested obtaining a new valuation for their home. A higher property value would mean a lower LVR, and potentially, the opportunity to negotiate a better interest rate with their current bank.

The New Home Valuation

After our team advised the couple to get a new valuation, we coordinated the process and arranged for an independent appraisal of the property. The results came back better than anticipated—the home was now valued at $787,767. This increase in property value brought their loan-to-value ratio down to 78.7%, a significant improvement from the original 95%.

Why is this LVR shift so important? Once a loan’s LVR falls below 80%, it opens the door to more favourable interest rates. Loans with an LVR under 80% are considered less risky by banks, meaning they are more likely to offer a reduced rate to borrowers who qualify. In this case, the Palmview couple’s new LVR was just under the 80% threshold, giving us the leverage we needed to approach the bank and request a reduction in their interest rate.

Negotiating with the Bank

Armed with the new valuation and a lower LVR, our team at Loanright Financial Services reached out to the couple’s lender. Because we had maintained a strong working relationship with the bank, we were confident in our ability to secure a better deal for our clients.

After discussions with the lender and presenting the new valuation, we were able to negotiate a new interest rate for the couple—without the need to refinance or switch banks. The result was a substantial reduction in their annual interest payments.

Thanks to the new rate, the couple is now saving $8,200 per year in interest payments. This isn’t just a one-time benefit; these savings will compound over the life of their loan, potentially freeing up tens of thousands of dollars that can now be used for other financial goals, such as home improvements, paying off other debts, or simply enjoying more financial flexibility in their day-to-day lives.

The Importance of Regular Home Loan Reviews

This success story highlights the importance of regular home loan reviews. Many homeowners assume that once their loan is set, there’s little they can do to improve their situation. However property values, interest rates, and personal financial circumstances change over time, and these changes can present opportunities to save money.

At Loanright Financial Services, we make it a priority to review each client’s loan every six months. This ongoing monitoring means we can stay ahead of changes in the market and take action when necessary, whether that’s renegotiating interest rates, suggesting refinancing, or providing advice on how to improve financial standing.

Conclusion: Proactive Financial Management Pays Off

The Palmview couple’s story is just one example of how proactive financial management can lead to significant savings. By staying on top of changes in property values and maintaining strong relationships with lenders, Loanright Financial Services was able to save our clients $8,200 a year—without them having to endure the hassle of refinancing or switching banks.

If you haven’t reviewed your home loan recently, now might be the perfect time to see if you could benefit from a similar opportunity. At Loanright Financial Services, we’re committed to helping you secure the best possible deal and ensuring that your home loan works for you, year after year.