Did you know the rate your bank advertises may not be the best rate you can get? With factors like the Reserve Bank of New

Zealand's official cash rate, the cost of funding for banks, and competitive pressures between lenders, there may be room to negotiate a better deal on both personal and business financing.

Here are some tips to help you secure a better interest rate in today’s financial climate:

1. Do Your Research

Before reaching out to your bank, check their available rates and compare them with other banks or lenders. You can use online resources like interestrates.co.nz for home loans, as well as specific business financing platforms for the best options in the market. Having this information will give you a clear picture of what you’re aiming for and what deals are out there.

2. Be Prepared

For both personal and business loans, gather your financial details, including income, expenses, assets, liabilities, credit score, and loan-to-value ratio. For business loans, be prepared to share your business' financial health, such as your cashflow, profit-and-loss statements, and any growth projections. This will help show you are proactive and know your current ability to repay the loan terms you are proposing. Be clear but realistic about the interest rate you want and the terms you’re looking for—whether for a home loan or for

business financing.

3. Ask for a Discount

When you contact your bank, clearly express that you're seeking a better interest rate. For business financing, explain how your business is performing and any future growth plans. Do some research and be aware of the rates other banks are currently offering. If your bank offers you a rate lower than their advertised rate, ask them if they can improve it. If the rate they offer is higher than the advertised rate (which can sometimes happen), politely ask for an explanation and try to negotiate for a better deal. This discussion could give you an

understanding of how the bank works out interest rates for different circumstances.

4. Negotiate Other Benefits

In addition to interest rates, consider negotiating other financial benefits that could lower your overall cost or offer greater flexibility. For both mortgages and business loans, these might include:

• Cashback offers
• Lower fees
• Repayment flexibility
• Offset accounts or redraw facilities
• For business financing, consider negotiating better terms for working capital lines, invoice financing, or repayment schedules

Sometimes, your bank might not be able to lower the interest rate further, but they may offer some incentives like the above that can save you money or make your loan more manageable.

5. Be Prepared to Switch Lenders

If your bank is not willing to offer a competitive deal, consider switching to another lender that can meet your needs. For business financing, switching lenders can provide better rates, more favourable terms, or even more specialised products tailored to your business type. However, ensure you consider the costs and benefits of switching, including break fees, application fees, legal fees, and any penalties, as well as the cashback or special offers from the new lender. Be sure to review the terms and conditions to ensure that the new loan suits your situation.

Negotiating a better interest rate on your home loan or business financing can save you thousands of dollars over time and allow you to pay off your loans faster. This is especially important for businesses, where managing cashflow efficiently is critical to success. With

some preparation, research, and persistence, you can secure better terms for both personal and business loans.

If you need assistance with your personal or business financing, contact your Client Advisor or email info@bfa.co.nz

We can help you navigate these negotiations, or put you in touch with a professional mortgage or business financing broker to advocate on your behalf.