One benefit that a competitive market place brings is the ability to negotiate rates down as a buyer and that may just help Australians with arranging cheaper home loans.

The federal government has made strides this year to make the market more competitive by eliminating exit fees – which made it easier for people to switch home loans and made fixed rate loans more attractive.

The other effect is that you can approach your existing lender more boldly and ask for a better deal because they’ll know that if they don’t give you the deal you’re after, you can look elsewhere.

Know The Market

The first step in the process is to be prepared and know the market. Nowadays it’s easy to gather the relevant information.

There’s no traipsing around collecting flyers from banks; simply find a reputable home loan comparison site (see http://www.lowerbills.com.au/home_loans ) and you will find all the best home loan deals around – including all the fees, terms and conditions that you need to know.

There’s no substitute for research – do the hard work upfront and get prepared to save yourself some money!

Use the Tools Available

There are other tools you can use to compare your present deal with others out there. Home loan comparison calculators can help and will allow you to perform a health check up on your present deal.

Take On Your Lender

Remember that small amounts shaved off your interest rates can equate to tens of thousands of dollars over the term of a loan so you need to ask for better deals and ask loudly!

For the cost of a phone call or a half an hour meeting you may just end up making huge savings by being armed with enough information to demand a better deal from your lender.

If you have a good credit history, have made regular repayments in the past and have researched the market thoroughly you can use these facts and figures to demand a better deal and not give up until you get it. Or you can move to another lender who will give it to you.

From the bank’s point of view they would rather keep you as a customer than find a new one to replace you.

Banks do make money from their customers’ lack of attention, as we pointed out in a recent blog post. If you get smart about your loan and others available out there, then you may just be able to negotiate yourself a New Year windfall in 2012.