February 18, 2025 • 28 mins
Loyalty doesn't always pay. Loyal customers can find themselves paying more to their bank, insurer, gas company, even their gym, than a new customer. Join Canna Campbell - a financial planner for 20 years - and Fear & Greed's Michael Thompson as they go through the exact script to follow to secure yourself a better deal, without needing to leave your provider.
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The information in this podcast is general in nature and does not take into account your personal circumstances, financial needs or objectives. Before acting on any information, you should consider the appropriateness of it and the relevant product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant Product Disclosure Statement or other offer document prior to acquiring any financial product.
Canna Campbell is a Corporate Authorised Representative and Corporate Credit Representative of Wealthstream Financial Group Pty Ltd ABN 35 152 803 113 Australian Financial Services Licensee AFSL 412079.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to How Today Afford That, the podcast that peeks
into the financial lives of everyday Australians. I'm Michael Thompson.
I'm an author and the co host of the podcast
Fear and Greed business news. As always, I am with
Canna Campbell, financial planner and founder of sugar Mama TV,
which is a financial literacy platform that you find pretty
much everywhere YouTube, podcast, books, Instagram, threads, TikTok, keynote, speeches everywhere.
Speaker 2 (00:25):
Hello, Canna, good morning. How are you?
Speaker 1 (00:27):
I am good and I am looking forward to today
because we are going to help everyone save a bit
of money today.
Speaker 2 (00:35):
That's what we do. We're good at this.
Speaker 1 (00:37):
Yeah, it's a lofty goal. Every single person who's listening
to this right now is going to save some money
because today we are talking about the idea of a
loyalty tax. We are looking at who is paying it
spoiler pretty much everyone right, how much it's costing you,
how to stop paying it, and most importantly, how to
(00:59):
start saving some money. Let's get straight into it. What
is a loyalty tax.
Speaker 2 (01:06):
So loyalty taxes where you simply pay because you've been
a long term customer and I don't really want to
point fingers here. But companies sometimes think that we're not
going to go and check our bills or shop around
for another deal, so they gradually and gently increase prices
without us necessarily noticing, or they fail to let us
(01:26):
know about any new special promotions and discounts that they
might have coming up. So essentially it's a financial penalty
for sticking around with one provider for too long and
not actually stopping to question the actual value and whether
you could be getting better value potentially elsewhere, or asking
for a better deal.
Speaker 1 (01:43):
Okay, And so typically this is where you will see
special deals being promoted for new customers and things like that,
and you're like, hey, I've been with you for five
years or ten years or something like, why don't I
get that price that they're offering.
Speaker 2 (01:57):
That's not fair? I want that deal too.
Speaker 1 (02:00):
Now, I think there is the general assumption that this
is all about banks. It is not all about banks,
is it? Because there are other service providers?
Speaker 2 (02:13):
Yes, So look, banks probably get the first finger pointing
deal when it comes to the term loyalty tax, but
it's not at all just limited to banks. Insurance companies,
you know, particularly personal insurance. Then there's gas and electricity,
you know, gym membership subscriptions, and I remember during Frugal February,
I called up my energy and gas provider, which are
(02:36):
the same company, and within minutes I had one hundred
and thirty dollars per month knocked off my plans.
Speaker 1 (02:44):
Did you say one hundred and thirty dollars?
Speaker 2 (02:46):
Yeah? Have you not been listening to any of my
Frugal February results?
Speaker 1 (02:51):
Yes, clearly not. Yeah, so well I hadn't. I wasn't
aware that the savings were so big. Yeah, that is
really impressive. You mentioned insurers, right, and I want to
kind of cover a whole lot of those, like gyms.
I'm surprised by gyms as well. But we just stay
on insurers for a moment, because everyone has some form
of insurance, right, whether it's your car insurance, a health insurance,
(03:11):
or your home insurance. You see that there is like
a loyalty discount when you go to renew, you get
kind of like a twenty five percent off of being
a loyal customer or something. Is that then a little
bit deceptive?
Speaker 2 (03:25):
It can be, So there's all sorts of benefits and
perpose it can come with some of these insurance policies,
you know, access to certain parks and entertainment and various
sporting activities. But you've got to really look at what
obviously what's applicable to you and whether you're going to
make the most of that. So, yes, there are discounts,
but there also are ones that can also encourage you
(03:47):
to spend money where you weren't going to necessarily, so
actually you can end up costing you even more, as
well as the fact that it's not necessarily that competitive.
A classic is you know that you see and it's
not just insurance companies, even particularly retail. You know they'll
have a special sale for the weekend where you spent
three hundred, but you don't have to pay two hundred. Now,
you may have never intended in going and spending three
(04:08):
hundred dolls in that store, even a fifty dollars in
that store, because of that offer, they've been enticed you
in and to spend and do obviously partner with their
colleagues and associates and partners.
Speaker 1 (04:20):
Okay, let's kind of go to home loans because or
banks generally, but focusing on home loans, I suppose because
this is probably the big one and the one that
is most Look at me making assumptions here, I'm hoping
this is a correct assumption that a loyalty tax on
a home loan where you have been with the bank
(04:43):
for a very long time, and you have been paying
perhaps one interest rate for quite some time, and you
see new customers being enticed to come over to this
bank with a fantastic interest rate, and you're thinking, why
aren't I getting that rate? Banks would be the one
that you are paying the most on a loyalty tax, right.
Speaker 2 (05:04):
Look, everyone is obviously in a different situation. But yes,
and I'm actually really glad you asked this question because
I've answer some numbers, and the numbers are looking quite sexy.
If I don't might say so myself. So if you
look at say an average home loan of about five
hundred thousand dollars, and you're paying on average over the
life of the loan, which is typically around thirty years,
around sort of six point five percent, but you then
(05:27):
negotiate five years into six percent, that's two and a
half thousand dollars a year in savings. Now, if you
think about that just for a ten year period alone,
that's twenty five thousand dollars. But though that potential cost
all that potential savings can go even further because if
you maintain your existing mortgage repayments as though they already
(05:50):
remain at six point five, even though you're onready being
charged six, you can potentially, say fifty five thousand dollars
and pay off your home two and a half years
off soon. So that loyalty tax is definitely not just
limited to the two and a half thousand dollars per Yeah,
it represents so much more. And of course, you know,
paying off your home loan two and a half years
(06:11):
earlier that those are mortgage repayments can go into super
to go into investing, to go into other lifestyle requirements.
So it really does pay to look at where you're
potentially being overcharged.
Speaker 1 (06:23):
How do you know? It's all well and good to say, hey,
you can do this, you can kind of get a
better deal, But how do you know if you are
actually paying a loyalty tax, if you are overpaying as
a loyal customer.
Speaker 2 (06:34):
Well, one thing's for sure, they're not going to call
you and tell.
Speaker 1 (06:36):
You they might.
Speaker 2 (06:38):
I think I've had one phone call like that in
my whole entire life.
Speaker 1 (06:41):
Really, what was it?
Speaker 2 (06:43):
It was? I think it maybe be in Foxtell yep,
And that was probably because I was threatened to leave.
Speaker 1 (06:47):
But so slightly different scenario.
Speaker 2 (06:50):
And I will admit my mortgage broker every year, if
not twice a year, he will call the bank on
my behalf okay, And he will then call me and say, hey,
just letting you know, I've just negotiated X basis points
off your home loan has already been applied. Just you'll
see those repayments coming down if you want to maintain them. So, yes,
I have seen it. But unfortunately, because these institutions play
(07:13):
you know know what we're like, we they won't go
and give it to us. We have to go and
find it ourselves. We need to arm ourselves with the
right type of information, do our research, know our numbers,
and then have the confidence to pick up the phone,
call the phone and say, hey, I think we need
to have a little chat.
Speaker 1 (07:29):
In a minute. We're going to go through what you
should say on the phone, almost a little bit of
a script. We could just role play, role play play.
Are you going to be the customer and I'll be
the banker?
Speaker 2 (07:39):
Why I want to be the customer. I'm going to
be hustling up a better deal.
Speaker 1 (07:43):
Okay, and I will be the service provider, maybe the
gas provider.
Speaker 2 (07:48):
I was thinking we could do the bank because most
people like to call their banks. That's the biggest savings.
Come on, we're all about maximizing our savings here. Let's
work efficiently. Go for the low hanging fruit here, Michael, So.
Speaker 1 (07:58):
Well, okay, look, shall we can I just touch on
the how you know you are paying a loyalty tax?
So first, because we talked about the fact they're not
going to call you up, you need to be checking
this yourself. Is it a case of say, with your
home loan, logging in to your bank account, seeing what
the home loan rate is that you're currently paying, going
(08:21):
to the bank website and seeing what the comparison rate
is or what the introductory rate is for new customers,
and going, hey, that's less.
Speaker 2 (08:31):
Yes, that's only half the story though. Half the job
you there need to go and have a look at
what the competition is offering.
Speaker 1 (08:38):
Okay, and that will tell you whether you're overpaying essentially,
or just whether you have fallen victim to a loyalty
tax exactly. Okay, why do you reckon people stay for
so long? Is it laziness? Is it complacency? Is it
just the fact that everyone we are all so busy
and this takes time.
Speaker 2 (08:56):
I think it's three things. I think, as you said,
life gets really busy, and unless we are sort of
backed into a corner and forced to actually review our bills,
like doing Frugal February, we need that trigger or that
financial crisis in our life to actually make us pick
up the phone or look at our bills or look
at our budgets and go all right, something something's got
(09:17):
to give here, like even an interest rate hike. But
then there's also the psychological factor. So a lot of
us assume that we're being taken care of because we're
being so loyal to our bank, to our gas provider
or energy provider, so we assume that we're going to
be We've being rewarded. Of course, we're on the best deal.
I've been with my bank for twelve years. Why would
they jeopardize, you know, damaging, and we're hourting and we
(09:38):
are overcharging. It's just ridiculous. So we kind of paint
this false sense of reality, but unfortunately it's not quite
as simplistic as that, and a little bit naive to
think like that. And then, of course, I think for
a lot of people is we feel completely overwhelmed, particularly
right now, with the idea of having to pick up
the phone have that awkward, sometimes uncomfor comfortable conversation that
(10:02):
does actually require you to actually do a little bit
of groundwork beforehand and then ask for something that we
don't necessarily fully grasp or understand the actual work involved,
and if it's even possible, so we could very easily
put it to the bottom of bileist things to do
and it never ever gets done. And I have shared
which I'm really hoping you remember this as a little
(10:23):
hack for people who are feeling overwhelmed make that phone call.
To try and make it as easy as possible is
have the telephone numbers in your phone saved, but in
the notes section, or even in the notes attached to
that contact, you have your policy numbers, or your homelow numbers,
or your customer service numbers, so that when you do
get someone who answers the phone, you've actually got a
lot of information that they can look up on your
behalf to get the conversation going.
Speaker 1 (10:45):
Yeah, and you can do it while they're sitting in
the car park waiting for someone or something like that.
You can make the most of those little moments of
downtime exactly.
Speaker 2 (10:52):
And it just specially when you're sitting there thinking I've
got to do it. And this is my newest real
solution is stop thinking about it. Just get it done
while you can. I'll forget about it all evaporate. So
I think you know, being on the front foot with
loyalty tax is really important. And the longer it drags on,
the bigger the cost to you. And you know we're
all on type budgets right now. Every dollar counts, So
(11:14):
cut the excuses, do some research and make those phone calls,
which will explain in a second.
Speaker 1 (11:19):
Okay, we will take a break, and then we're going
to talk about the information that you need to gather
to make these calls. And then and then a role play.
Very excited about this cana. We are talking about loyalty
taxes today. This is essentially the idea that you are
(11:41):
overpaying with a provider of some kind, whether it's your
bank with your home loan, or your gas, your utilities
providing your water, anything along those lines. Insurance gyms that
you have been there for long enough that really you're
kind of being left behind. There are better offers out
there and you could getting a better price, And this
is all about how to get that better price. For
(12:03):
you to make that call though, to ring up and
say I want a better deal, what information do you
need to have in place? You mentioned before, just the
basics of having your policy numbers and all those kinds
of things, But surely you also need those some a
bit of leverage to say I'm getting I could get
a better deal over at this other place.
Speaker 2 (12:22):
Yes, you are spot on, So the more information you
have the better. So preparation is key here. Don't just
jump on the phone because you could end up wasting
quite a bit of time. So what I recommend you
do is go and jump on your internet banking and
look at the interest rate that you are paying. It
should be clearly marked. Also check and see if there
is a discount that's been applied. I know in the
(12:42):
past I've looked at my home loan rate and fookoh,
I can't believe in paying that. But then I've looked
a few lines down and there's actually a discount on
that rate. So make sure you have an accurate amount
of information about what you really are paying. Also things
that are really important that you can use your advantage,
obviously knowing how long you've been with your bank for
your financial institution and how much you've paid off. And
(13:03):
of course if you have a good repayment history, you've
never defaulted, there's never been any late payments, any awkward
phone calls. You've got a good standing, solid history and
not only being a loyal customer but also being a
very responsible, reliable one. Then you also want to go
and have a low because you mentioned see what they're
offering new customers and see what if there's any particular
(13:26):
terms and conditions, because whilst it may look like a
brilliant honeymoon rate, there could be some final details that
it's until you go digging, you go, actually that's not
really that good.
Speaker 1 (13:35):
Adeal because they can often be introductory rates because it
might only be for say six months or twelve months,
and you are talking in the case of a homelane,
you're talking kind of twenty five plus.
Speaker 2 (13:46):
Years exactly, and it may revert to something that's actually
higher than what you are paying. So it's worth doing
your research. Then of course you go and look at
what the competition is paying. What's another institution offering to
move your loans over to them? Have everything written down
and make sure you've written it down so you can
refer to it so you can say bank X y
Z now offering this, bank ABC or offering that, so
(14:09):
that they know you are serious, You've done your research,
and this is not a conversation to be fobbed off.
The bank would necessarily do that, but you go to
come across a lot more. You're gonna be taken more
seriously and you're gonna have a lot more productive conversation.
So then when you've got all of that information, you
can now call the bank and you are literally it's
not all guns blazing, but you can say like you're
(14:32):
a miss, like pitching yourself as I deserve more me time,
like I want a better deal on my on my
home loan. And that is when you get the balls rolling.
And this is where you can see where it all lands.
Speaker 1 (14:44):
Is it time?
Speaker 2 (14:45):
It is time?
Speaker 1 (14:46):
It's time for the role play.
Speaker 2 (14:47):
That's wrong.
Speaker 1 (14:48):
Okay, I say you are the customer customer, and I
am the bank employee, and I'm very nice because I've
just come back from holidays as the bank employ I'm
really getting into my character here, and you know what,
I'm feeling refreshed, I'm recharged. I'm looking forward to this
conversation with my customer.
Speaker 2 (15:06):
Okay, I'll be gentle.
Speaker 1 (15:07):
Okay, ring ring ring, green ring, green ring ring, and
I'll pick up quite quickly. Hello, welcome to the Homeland's Department.
Speaker 2 (15:14):
This is Steve Hi, Steve, how are you today?
Speaker 1 (15:18):
Very well? Thanks? Can I start with your name? Please?
Speaker 2 (15:19):
Absolutely? Canna Campbell?
Speaker 1 (15:22):
Okay, Canna, just looking up and you're having a good.
Speaker 2 (15:24):
Day, Cannah, I am.
Speaker 1 (15:25):
Thank you for asking, and I've got your number here,
which I won't give out on the phone for for
security reasons. Let's just assume that we've done all the
security checks. I just realized we could have a few
security preachers here. But what can I do for you today, Cannah.
Speaker 2 (15:41):
So I've actually been a customer of this fine institution
for about eleven years now.
Speaker 1 (15:46):
I can see that you've been with us for a
long time.
Speaker 2 (15:48):
Yes, yes, very loyal, and I am just doing a
bit of a budget revamp and I'm looking to save
some money because says you can tell the country things
are quite tight right now. I just wondering about the
interest rate that I'm paying. It looks like i'm paying
this and I have been making all my repayments. I've
been withins with you, but eleven years I've made extra repayments.
(16:12):
My home is worth and I sorry I should have
mentioned you should get the valuation of your home as well,
and obviously you know how much you ope. But I've
just done a quick check on the house dot com
and my home's actually gone up in values of a
lot of equity. My loan has come down because I've
always made sure I stuck to my repayments and made
ad hoc repayments here and there. So I'm doing really well.
(16:32):
I'm a good customer. But what's got me going? And
the purpose for this call is I think there are
better interest rates out there, and I noticed on your
website you're offering new customers fifty bases points less than
what I'm currently paying. So can we have a chat,
(16:52):
And if you can't help me, would you mind popping
me through to somebody that can.
Speaker 1 (16:56):
Look. I'm certain I can help you, and you've clearly
done your research. You must listen two podcasts.
Speaker 2 (17:01):
Oh how do they thought that's one of my favorites.
Speaker 1 (17:03):
Actually, oh, well there you go. Look, yes, I can
see here you have been with us for eleven years
and you're currently paying this amount, and look, I'm just
gonna pop you on hold. I'll just go and see
what I can do.
Speaker 2 (17:14):
Well, whilst you're at it, before you go, I did
also notice that bank x y Z actually have an
even better offer.
Speaker 1 (17:23):
Well, then, yes, you're getting out of it that quickly.
I was trying to put you on hold straight away.
I'm going to I'm going to go talk to my
manager and see what I can do here in that scenario. Sorry,
I've just stepped out of Steve's character for a moment.
Is there a risk that they will say because retaining
your customer is going to be their number one priority?
Speaker 2 (17:43):
Right?
Speaker 1 (17:43):
Yes? Okay, so they're not going to say you can
comfortably say look, I can see like Bank XYZ is
offering this. There's no risk that good old Steve over
here is going to say, on your bike, head on
over to x y Z.
Speaker 2 (17:56):
Then well they're not going to say on your bike,
but they're just going to say, no, we can't match
that rate, and well we can't beat that rate.
Speaker 1 (18:02):
Okay, So you've.
Speaker 2 (18:03):
Got nothing to lose from this phone call? Okay, and
I am my apologies. I should have mentioned you do need.
It does help a lot if you have the valuation
of your home or property with you, and you can
get it from for free, very quickly, on a website
called onthhouse dot com dot Are you okay?
Speaker 1 (18:16):
All right? Okay, I'm coming back in here, Steve. You
thanks for holding.
Speaker 2 (18:21):
There, Canna, Oh, thank you, no problem, had you go.
Speaker 1 (18:23):
I've had a chat and look, and yes, you've been
with us for eleven years? Are you paying this amount?
And look, while the interest rate that you quoted is
an introductory price for new customers, we will be able to,
based on the amount of time that you've been with us,
lower your standard your variable rate by fifty basis points.
Speaker 2 (18:44):
How does that sound? That sounds great, and thank you
so much. But I was actually looking at you hoping
hopefully being able to beat the rate. It's great to
match it, but I'd like it to be beaten because,
as I said, across the road, they're offering a better
rate than what you're reduce rates.
Speaker 1 (19:01):
All right, I'm just going to pop you back on hold, Canna,
I do never want to be on the other end
of a call from you because this is I thought,
fifty basis points. I would have you across the line
just there.
Speaker 2 (19:11):
So this is my point. Yeah, and this is a
really important one. Don't settle.
Speaker 1 (19:15):
Okay.
Speaker 2 (19:17):
Also that's marriage advice as well, coming from someone who
has a few divorces, obviously, demgate relationship advice fer actually
financial yes, relationship know, but don't settle. Don't go you
know what, that's good enough for me, That's fine. Don't
that's that's lazy. No, if you can still get a
better rate somewhere else, continue on with that research and investigation.
(19:38):
Don't just stop at that, because there is still I mean,
as I've just demonstrated, you could potentially save by fifty
basis points over the course of a twenty five year
loan five years in fifty five thousand dollars and pay
for your home loan two and a half years earlier.
So hang on, don't just stop and settle at that
that you know, the fifty basis points. If you could
get it further, that discome bigot. Go go and apply it.
(20:00):
But you would accept it with gracious open arms. But
you go thank you so much. That's great, and they
will typically tend to apply it reasonably quickly, and you
don't there's not too much paperwork involt. However, you don't
necessarily stop there. You keep going and you go and
this is where you go and speak to a mortgage
broker and say, hey, they did reduce my rate, They've
(20:21):
done a good deal for me, but I'm still a
little bit irritated that they haven't matched the rate or
beat the competition.
Speaker 1 (20:27):
Okay, And is there room to move on other things
as well? Like you're calling up and you've just asked
good old Steve just for a reduction in the rate,
but say you were paying, say a mortgage package fee
or something like that, can you kind of argue to
get that down?
Speaker 2 (20:43):
Absolutely definitely. And again this is why mortgage broker is
really good because they know those finer details that they'll know, Okay,
you're paying a four hundred and fifty dollars annual fee
or you're paying this card fee. They will go in
and know those things which you may have not necessarily
thought of when you're making that conversation because you're purely
focused on, you know, the top line rate. So yes,
(21:04):
these are things that can be definitely added in, and
they're often the sort of last things that they will
add in if they think they're going to lose you.
Speaker 1 (21:11):
Okay, all right, so Steve's back. Can are you still there?
Speaker 2 (21:14):
Yes? I most definitely am.
Speaker 1 (21:16):
Look you you really have done your research, and look,
we can match the deal that you have seen elsewhere
and which will be a further twenty basis point reduction.
But you will need to give me a shout out
on your podcast.
Speaker 2 (21:36):
Step No, probably, all right, there we go.
Speaker 1 (21:38):
I'm sure they're not going to attach conditions or something
to it like that. I'm just like, oh, there's got
to be a cat to you. I'm like, no, I
don't think there would be. It would just be you
have been a loyal customer, you have done your research,
and that's the key that you have gone in there.
You've shown them what you can get elsewhere. You've established
the value of your property. You've established that you have
built up additional equity in your property, and that you
are deserving of a reduction. Other there is a chance
(22:00):
that they might lose you as a customer.
Speaker 2 (22:02):
And even if you do, hear no, if Steve I
was to go, you know, what, I'm actually going to
find it even better deal. I'm going to get in
touch with a mortgage broker and or do my own
research and find somewhere even better. Even though I've accepted
your rate, you can still the answer is still not
know because when you do go to sign with another bank,
(22:23):
your original bank will call you from the retention team
and you will have a senior management manager on the
phone asking you why are you leaving us? What can
we do to keep you? I actually had this conversation
with a bank about six weeks ago, and I spent
twenty minutes on the phone. She's like, what can we
do to keep your business? You've been with us a
(22:45):
long time. We really don't want you to go. And
it was fascinating hearing her talk. And she said, the
moment this situation is changed, we want to get you
back on board and reshift your loan back over like
it was really interesting. She was willing to do lots
of things. Unfortunately, was too little, too late. It was
(23:05):
the problem. But you know, even if you hear no,
we're not going to do that, it's not until it
comes to crunch time you'll you never know what rabbits
can be pulled out of hats by the banking institutions.
Speaker 1 (23:15):
If that conversation with good old Steve had gone in
a different direction where okay, it's come back and offered
you the fifty basis point reduction, right, and then you've said, look,
that's great, thank you very much. I accept that, but
can he go further? He goes off, comes back, and
all of a sudden he says, look, that is the
best we're going to be able to do. That is
a really competitive rate that we've offered to you in
recognition of the long time that you spent with us
(23:36):
here at the bank, and we hope that that will
be satisfactory to you. What do you say?
Speaker 2 (23:41):
Then? Again, you say thank you? And I mean that's
a huge, huge interest rate savings.
Speaker 1 (23:47):
Yeah, I did, I did. I did right by.
Speaker 2 (23:48):
You, Steve. But you still if you know that there
are better deals out there, again like, don't settle you
you you know it is your money, your life, and
you're right to the best deal possible, so accept it.
As I said, don't settle. Do research. And this is
where a mortgage broker is so helpful because they can
actually look at do a much deeper dive and they
(24:10):
actually could say, look, your credit report is not as
squeaky clean as you may have thought. You're actually on
a really good rate, and if you were to save
some money, it's actually a very very small amount of
money and not worth the hassle of moving. Or they'll
run the numbers for you. They will let you know,
and this is the value of a really good quality
mortgage broker. And you want to make sure that these
(24:31):
savings really count. And I'm going to chime in my
financial planning general advice here. When you see those mortgage
repayments reduced from your new flashy lower interest rate, if
you can make those savings count, don't let the lifestyle
creep kick in or dominate and destroy those savings. Try
if you can, if your budget allows, and obviously not
(24:52):
everyone can, and it's been very tight for all of us,
try and maintain at least some of those mortgage repayments
so you can actually see that true impact act of
your loyalty tax slashing.
Speaker 1 (25:03):
Okay, and so finishing up that phone call, you would
just accept it, and you don't actually need to kind
of say, yeah, that's great, but I reckon, I can
still get a better deal. You can just accept it
and hang up the phone and come back and have
another crack after you've done further research.
Speaker 2 (25:17):
Right exactly, except that because you want to bank those
savings straight away, you don't cut your nose off to
spain face. Fine, don't bother giving me that interests rate cut?
Speaker 1 (25:26):
I hate you, Steve.
Speaker 2 (25:29):
The back of the garden. No, take it, work with it,
build from there, and then then you've got great negotiating power.
Go to another institution going, hey, my bank charges me this.
Can you go in further with that? Because obviously it's
a tighter cut.
Speaker 1 (25:44):
Do you reckon? When your call comes into a call center,
everyone's like, Canna's calling.
Speaker 2 (25:49):
Who's February?
Speaker 1 (25:50):
They're hearing this week?
Speaker 2 (25:51):
Yeah, my number comes up on a big dashboard like flashing.
Speaker 1 (25:56):
One last final question. Because Steve has done you sent
him on stress leave now after your call? Are the
downsides to switching providers? And you kind of flagged one
of the fact that the rate might not actually be
as good as it looks, that it might be an
introductory one. But is there an any other downsides we
(26:17):
need to be aware of?
Speaker 2 (26:18):
Yes, there are lots. So sometimes you know, if you
do refinance to a new institution, or even have to
accept a certain condition of your existing bank. Sometimes they
will reduce limits if you have a large amount of
money in an officet account or a regional facility. As
part of the terms and conditions, they might say, look,
you've got all the sexist funds here, can we reduce
the limit. So this is again why a mortgage brokers
(26:40):
is very, very helpful. Also, I had a situation where
this was the refinancing call from six weeks ago. The
new internet banking is not as intuitive, it's very clunky,
it's very eighties, and it is a little bit frustrating,
but obviously the benefits are there so you and then
of course there are all those other can you know,
(27:01):
all the bells and whistles sometimes actually can end up
costing you more, but some people are happy to spend
more because it helps them stay focused and paying off
their homelan and all those wonderful budgeting tools that often
come with internet banking these days with your home and
they can be very valuable, and you can lose those insights.
So there are definitely things you can potentially disadvantages in refinancing,
(27:25):
but a mortgage broker will talk you through these things
before you sun the dotted line.
Speaker 1 (27:30):
Okay, I think we've done a fairly comprehensive job of
going through loyalty taxes. And I didn't realize I was
hoping I would get to be the customer in the sorry,
so I was not prepared to be Steve today. But look,
you know what, I think we've delivered a valuable blueprint
for those kinds of conversations. If anybody wants further information
(27:51):
from you, where do they find you?
Speaker 2 (27:54):
The best basic in contact with me is actually at
Canna Campbell Official because unfortunately in my Instagram account Sugar
ma My TV has been jammed up with the Erotic
variety messages, so I can't actually look at my inboxes.
So if you need to get a hold of me,
message me through Instagram at Canna Campbell Official, not Sugar
Mama TV because I just can't bring myself to look
(28:15):
at my inbox.
Speaker 1 (28:16):
Then alright, If.
Speaker 2 (28:17):
Anyone has any advice, let me know how to get
rid of this problem.
Speaker 1 (28:21):
Cheapers and you can hear me every day with Sean
Aylmer on Fear and Greed, daily business news for people
who make their own decisions. Thank you for listening. To
how do they afford that? Remember it hit follow on
the podcast, and the very best thing that you can
do is tell somebody else, send them the link to
this episode and spread the word about how to do
they afford that? Thank you very much for your company.
Join us again next week.
Welcome to How Today Afford That, the podcast that peeks
into the financial lives of everyday Australians. I'm Michael Thompson.
I'm an author and the co host of the podcast
Fear and Greed business news. As always, I am with
Canna Campbell, financial planner and founder of sugar Mama TV,
which is a financial literacy platform that you find pretty
much everywhere YouTube, podcast, books, Instagram, threads, TikTok, keynote, speeches everywhere.
Speaker 2 (00:25):
Hello, Canna, good morning. How are you?
Speaker 1 (00:27):
I am good and I am looking forward to today
because we are going to help everyone save a bit
of money today.
Speaker 2 (00:35):
That's what we do. We're good at this.
Speaker 1 (00:37):
Yeah, it's a lofty goal. Every single person who's listening
to this right now is going to save some money
because today we are talking about the idea of a
loyalty tax. We are looking at who is paying it
spoiler pretty much everyone right, how much it's costing you,
how to stop paying it, and most importantly, how to
(00:59):
start saving some money. Let's get straight into it. What
is a loyalty tax.
Speaker 2 (01:06):
So loyalty taxes where you simply pay because you've been
a long term customer and I don't really want to
point fingers here. But companies sometimes think that we're not
going to go and check our bills or shop around
for another deal, so they gradually and gently increase prices
without us necessarily noticing, or they fail to let us
(01:26):
know about any new special promotions and discounts that they
might have coming up. So essentially it's a financial penalty
for sticking around with one provider for too long and
not actually stopping to question the actual value and whether
you could be getting better value potentially elsewhere, or asking
for a better deal.
Speaker 1 (01:43):
Okay, And so typically this is where you will see
special deals being promoted for new customers and things like that,
and you're like, hey, I've been with you for five
years or ten years or something like, why don't I
get that price that they're offering.
Speaker 2 (01:57):
That's not fair? I want that deal too.
Speaker 1 (02:00):
Now, I think there is the general assumption that this
is all about banks. It is not all about banks,
is it? Because there are other service providers?
Speaker 2 (02:13):
Yes, So look, banks probably get the first finger pointing
deal when it comes to the term loyalty tax, but
it's not at all just limited to banks. Insurance companies,
you know, particularly personal insurance. Then there's gas and electricity,
you know, gym membership subscriptions, and I remember during Frugal February,
I called up my energy and gas provider, which are
(02:36):
the same company, and within minutes I had one hundred
and thirty dollars per month knocked off my plans.
Speaker 1 (02:44):
Did you say one hundred and thirty dollars?
Speaker 2 (02:46):
Yeah? Have you not been listening to any of my
Frugal February results?
Speaker 1 (02:51):
Yes, clearly not. Yeah, so well I hadn't. I wasn't
aware that the savings were so big. Yeah, that is
really impressive. You mentioned insurers, right, and I want to
kind of cover a whole lot of those, like gyms.
I'm surprised by gyms as well. But we just stay
on insurers for a moment, because everyone has some form
of insurance, right, whether it's your car insurance, a health insurance,
(03:11):
or your home insurance. You see that there is like
a loyalty discount when you go to renew, you get
kind of like a twenty five percent off of being
a loyal customer or something. Is that then a little
bit deceptive?
Speaker 2 (03:25):
It can be, So there's all sorts of benefits and
perpose it can come with some of these insurance policies,
you know, access to certain parks and entertainment and various
sporting activities. But you've got to really look at what
obviously what's applicable to you and whether you're going to
make the most of that. So, yes, there are discounts,
but there also are ones that can also encourage you
(03:47):
to spend money where you weren't going to necessarily, so
actually you can end up costing you even more, as
well as the fact that it's not necessarily that competitive.
A classic is you know that you see and it's
not just insurance companies, even particularly retail. You know they'll
have a special sale for the weekend where you spent
three hundred, but you don't have to pay two hundred. Now,
you may have never intended in going and spending three
(04:08):
hundred dolls in that store, even a fifty dollars in
that store, because of that offer, they've been enticed you
in and to spend and do obviously partner with their
colleagues and associates and partners.
Speaker 1 (04:20):
Okay, let's kind of go to home loans because or
banks generally, but focusing on home loans, I suppose because
this is probably the big one and the one that
is most Look at me making assumptions here, I'm hoping
this is a correct assumption that a loyalty tax on
a home loan where you have been with the bank
(04:43):
for a very long time, and you have been paying
perhaps one interest rate for quite some time, and you
see new customers being enticed to come over to this
bank with a fantastic interest rate, and you're thinking, why
aren't I getting that rate? Banks would be the one
that you are paying the most on a loyalty tax, right.
Speaker 2 (05:04):
Look, everyone is obviously in a different situation. But yes,
and I'm actually really glad you asked this question because
I've answer some numbers, and the numbers are looking quite sexy.
If I don't might say so myself. So if you
look at say an average home loan of about five
hundred thousand dollars, and you're paying on average over the
life of the loan, which is typically around thirty years,
around sort of six point five percent, but you then
(05:27):
negotiate five years into six percent, that's two and a
half thousand dollars a year in savings. Now, if you
think about that just for a ten year period alone,
that's twenty five thousand dollars. But though that potential cost
all that potential savings can go even further because if
you maintain your existing mortgage repayments as though they already
(05:50):
remain at six point five, even though you're onready being
charged six, you can potentially, say fifty five thousand dollars
and pay off your home two and a half years
off soon. So that loyalty tax is definitely not just
limited to the two and a half thousand dollars per Yeah,
it represents so much more. And of course, you know,
paying off your home loan two and a half years
(06:11):
earlier that those are mortgage repayments can go into super
to go into investing, to go into other lifestyle requirements.
So it really does pay to look at where you're
potentially being overcharged.
Speaker 1 (06:23):
How do you know? It's all well and good to say, hey,
you can do this, you can kind of get a
better deal, But how do you know if you are
actually paying a loyalty tax, if you are overpaying as
a loyal customer.
Speaker 2 (06:34):
Well, one thing's for sure, they're not going to call
you and tell.
Speaker 1 (06:36):
You they might.
Speaker 2 (06:38):
I think I've had one phone call like that in
my whole entire life.
Speaker 1 (06:41):
Really, what was it?
Speaker 2 (06:43):
It was? I think it maybe be in Foxtell yep,
And that was probably because I was threatened to leave.
Speaker 1 (06:47):
But so slightly different scenario.
Speaker 2 (06:50):
And I will admit my mortgage broker every year, if
not twice a year, he will call the bank on
my behalf okay, And he will then call me and say, hey,
just letting you know, I've just negotiated X basis points
off your home loan has already been applied. Just you'll
see those repayments coming down if you want to maintain them. So, yes,
I have seen it. But unfortunately, because these institutions play
(07:13):
you know know what we're like, we they won't go
and give it to us. We have to go and
find it ourselves. We need to arm ourselves with the
right type of information, do our research, know our numbers,
and then have the confidence to pick up the phone,
call the phone and say, hey, I think we need
to have a little chat.
Speaker 1 (07:29):
In a minute. We're going to go through what you
should say on the phone, almost a little bit of
a script. We could just role play, role play play.
Are you going to be the customer and I'll be
the banker?
Speaker 2 (07:39):
Why I want to be the customer. I'm going to
be hustling up a better deal.
Speaker 1 (07:43):
Okay, and I will be the service provider, maybe the
gas provider.
Speaker 2 (07:48):
I was thinking we could do the bank because most
people like to call their banks. That's the biggest savings.
Come on, we're all about maximizing our savings here. Let's
work efficiently. Go for the low hanging fruit here, Michael, So.
Speaker 1 (07:58):
Well, okay, look, shall we can I just touch on
the how you know you are paying a loyalty tax?
So first, because we talked about the fact they're not
going to call you up, you need to be checking
this yourself. Is it a case of say, with your
home loan, logging in to your bank account, seeing what
the home loan rate is that you're currently paying, going
(08:21):
to the bank website and seeing what the comparison rate
is or what the introductory rate is for new customers,
and going, hey, that's less.
Speaker 2 (08:31):
Yes, that's only half the story though. Half the job
you there need to go and have a look at
what the competition is offering.
Speaker 1 (08:38):
Okay, and that will tell you whether you're overpaying essentially,
or just whether you have fallen victim to a loyalty
tax exactly. Okay, why do you reckon people stay for
so long? Is it laziness? Is it complacency? Is it
just the fact that everyone we are all so busy
and this takes time.
Speaker 2 (08:56):
I think it's three things. I think, as you said,
life gets really busy, and unless we are sort of
backed into a corner and forced to actually review our bills,
like doing Frugal February, we need that trigger or that
financial crisis in our life to actually make us pick
up the phone or look at our bills or look
at our budgets and go all right, something something's got
(09:17):
to give here, like even an interest rate hike. But
then there's also the psychological factor. So a lot of
us assume that we're being taken care of because we're
being so loyal to our bank, to our gas provider
or energy provider, so we assume that we're going to
be We've being rewarded. Of course, we're on the best deal.
I've been with my bank for twelve years. Why would
they jeopardize, you know, damaging, and we're hourting and we
(09:38):
are overcharging. It's just ridiculous. So we kind of paint
this false sense of reality, but unfortunately it's not quite
as simplistic as that, and a little bit naive to
think like that. And then, of course, I think for
a lot of people is we feel completely overwhelmed, particularly
right now, with the idea of having to pick up
the phone have that awkward, sometimes uncomfor comfortable conversation that
(10:02):
does actually require you to actually do a little bit
of groundwork beforehand and then ask for something that we
don't necessarily fully grasp or understand the actual work involved,
and if it's even possible, so we could very easily
put it to the bottom of bileist things to do
and it never ever gets done. And I have shared
which I'm really hoping you remember this as a little
(10:23):
hack for people who are feeling overwhelmed make that phone call.
To try and make it as easy as possible is
have the telephone numbers in your phone saved, but in
the notes section, or even in the notes attached to
that contact, you have your policy numbers, or your homelow numbers,
or your customer service numbers, so that when you do
get someone who answers the phone, you've actually got a
lot of information that they can look up on your
behalf to get the conversation going.
Speaker 1 (10:45):
Yeah, and you can do it while they're sitting in
the car park waiting for someone or something like that.
You can make the most of those little moments of
downtime exactly.
Speaker 2 (10:52):
And it just specially when you're sitting there thinking I've
got to do it. And this is my newest real
solution is stop thinking about it. Just get it done
while you can. I'll forget about it all evaporate. So
I think you know, being on the front foot with
loyalty tax is really important. And the longer it drags on,
the bigger the cost to you. And you know we're
all on type budgets right now. Every dollar counts, So
(11:14):
cut the excuses, do some research and make those phone calls,
which will explain in a second.
Speaker 1 (11:19):
Okay, we will take a break, and then we're going
to talk about the information that you need to gather
to make these calls. And then and then a role play.
Very excited about this cana. We are talking about loyalty
taxes today. This is essentially the idea that you are
(11:41):
overpaying with a provider of some kind, whether it's your
bank with your home loan, or your gas, your utilities
providing your water, anything along those lines. Insurance gyms that
you have been there for long enough that really you're
kind of being left behind. There are better offers out
there and you could getting a better price, And this
is all about how to get that better price. For
(12:03):
you to make that call though, to ring up and
say I want a better deal, what information do you
need to have in place? You mentioned before, just the
basics of having your policy numbers and all those kinds
of things, But surely you also need those some a
bit of leverage to say I'm getting I could get
a better deal over at this other place.
Speaker 2 (12:22):
Yes, you are spot on, So the more information you
have the better. So preparation is key here. Don't just
jump on the phone because you could end up wasting
quite a bit of time. So what I recommend you
do is go and jump on your internet banking and
look at the interest rate that you are paying. It
should be clearly marked. Also check and see if there
is a discount that's been applied. I know in the
(12:42):
past I've looked at my home loan rate and fookoh,
I can't believe in paying that. But then I've looked
a few lines down and there's actually a discount on
that rate. So make sure you have an accurate amount
of information about what you really are paying. Also things
that are really important that you can use your advantage,
obviously knowing how long you've been with your bank for
your financial institution and how much you've paid off. And
(13:03):
of course if you have a good repayment history, you've
never defaulted, there's never been any late payments, any awkward
phone calls. You've got a good standing, solid history and
not only being a loyal customer but also being a
very responsible, reliable one. Then you also want to go
and have a low because you mentioned see what they're
offering new customers and see what if there's any particular
(13:26):
terms and conditions, because whilst it may look like a
brilliant honeymoon rate, there could be some final details that
it's until you go digging, you go, actually that's not
really that good.
Speaker 1 (13:35):
Adeal because they can often be introductory rates because it
might only be for say six months or twelve months,
and you are talking in the case of a homelane,
you're talking kind of twenty five plus.
Speaker 2 (13:46):
Years exactly, and it may revert to something that's actually
higher than what you are paying. So it's worth doing
your research. Then of course you go and look at
what the competition is paying. What's another institution offering to
move your loans over to them? Have everything written down
and make sure you've written it down so you can
refer to it so you can say bank X y
Z now offering this, bank ABC or offering that, so
(14:09):
that they know you are serious, You've done your research,
and this is not a conversation to be fobbed off.
The bank would necessarily do that, but you go to
come across a lot more. You're gonna be taken more
seriously and you're gonna have a lot more productive conversation.
So then when you've got all of that information, you
can now call the bank and you are literally it's
not all guns blazing, but you can say like you're
(14:32):
a miss, like pitching yourself as I deserve more me time,
like I want a better deal on my on my
home loan. And that is when you get the balls rolling.
And this is where you can see where it all lands.
Speaker 1 (14:44):
Is it time?
Speaker 2 (14:45):
It is time?
Speaker 1 (14:46):
It's time for the role play.
Speaker 2 (14:47):
That's wrong.
Speaker 1 (14:48):
Okay, I say you are the customer customer, and I
am the bank employee, and I'm very nice because I've
just come back from holidays as the bank employ I'm
really getting into my character here, and you know what,
I'm feeling refreshed, I'm recharged. I'm looking forward to this
conversation with my customer.
Speaker 2 (15:06):
Okay, I'll be gentle.
Speaker 1 (15:07):
Okay, ring ring ring, green ring, green ring ring, and
I'll pick up quite quickly. Hello, welcome to the Homeland's Department.
Speaker 2 (15:14):
This is Steve Hi, Steve, how are you today?
Speaker 1 (15:18):
Very well? Thanks? Can I start with your name? Please?
Speaker 2 (15:19):
Absolutely? Canna Campbell?
Speaker 1 (15:22):
Okay, Canna, just looking up and you're having a good.
Speaker 2 (15:24):
Day, Cannah, I am.
Speaker 1 (15:25):
Thank you for asking, and I've got your number here,
which I won't give out on the phone for for
security reasons. Let's just assume that we've done all the
security checks. I just realized we could have a few
security preachers here. But what can I do for you today, Cannah.
Speaker 2 (15:41):
So I've actually been a customer of this fine institution
for about eleven years now.
Speaker 1 (15:46):
I can see that you've been with us for a
long time.
Speaker 2 (15:48):
Yes, yes, very loyal, and I am just doing a
bit of a budget revamp and I'm looking to save
some money because says you can tell the country things
are quite tight right now. I just wondering about the
interest rate that I'm paying. It looks like i'm paying
this and I have been making all my repayments. I've
been withins with you, but eleven years I've made extra repayments.
(16:12):
My home is worth and I sorry I should have
mentioned you should get the valuation of your home as well,
and obviously you know how much you ope. But I've
just done a quick check on the house dot com
and my home's actually gone up in values of a
lot of equity. My loan has come down because I've
always made sure I stuck to my repayments and made
ad hoc repayments here and there. So I'm doing really well.
(16:32):
I'm a good customer. But what's got me going? And
the purpose for this call is I think there are
better interest rates out there, and I noticed on your
website you're offering new customers fifty bases points less than
what I'm currently paying. So can we have a chat,
(16:52):
And if you can't help me, would you mind popping
me through to somebody that can.
Speaker 1 (16:56):
Look. I'm certain I can help you, and you've clearly
done your research. You must listen two podcasts.
Speaker 2 (17:01):
Oh how do they thought that's one of my favorites.
Speaker 1 (17:03):
Actually, oh, well there you go. Look, yes, I can
see here you have been with us for eleven years
and you're currently paying this amount, and look, I'm just
gonna pop you on hold. I'll just go and see
what I can do.
Speaker 2 (17:14):
Well, whilst you're at it, before you go, I did
also notice that bank x y Z actually have an
even better offer.
Speaker 1 (17:23):
Well, then, yes, you're getting out of it that quickly.
I was trying to put you on hold straight away.
I'm going to I'm going to go talk to my
manager and see what I can do here in that scenario. Sorry,
I've just stepped out of Steve's character for a moment.
Is there a risk that they will say because retaining
your customer is going to be their number one priority?
Speaker 2 (17:43):
Right?
Speaker 1 (17:43):
Yes? Okay, so they're not going to say you can
comfortably say look, I can see like Bank XYZ is
offering this. There's no risk that good old Steve over
here is going to say, on your bike, head on
over to x y Z.
Speaker 2 (17:56):
Then well they're not going to say on your bike,
but they're just going to say, no, we can't match
that rate, and well we can't beat that rate.
Speaker 1 (18:02):
Okay, So you've.
Speaker 2 (18:03):
Got nothing to lose from this phone call? Okay, and
I am my apologies. I should have mentioned you do need.
It does help a lot if you have the valuation
of your home or property with you, and you can
get it from for free, very quickly, on a website
called onthhouse dot com dot Are you okay?
Speaker 1 (18:16):
All right? Okay, I'm coming back in here, Steve. You
thanks for holding.
Speaker 2 (18:21):
There, Canna, Oh, thank you, no problem, had you go.
Speaker 1 (18:23):
I've had a chat and look, and yes, you've been
with us for eleven years? Are you paying this amount?
And look, while the interest rate that you quoted is
an introductory price for new customers, we will be able to,
based on the amount of time that you've been with us,
lower your standard your variable rate by fifty basis points.
Speaker 2 (18:44):
How does that sound? That sounds great, and thank you
so much. But I was actually looking at you hoping
hopefully being able to beat the rate. It's great to
match it, but I'd like it to be beaten because,
as I said, across the road, they're offering a better
rate than what you're reduce rates.
Speaker 1 (19:01):
All right, I'm just going to pop you back on hold, Canna,
I do never want to be on the other end
of a call from you because this is I thought,
fifty basis points. I would have you across the line
just there.
Speaker 2 (19:11):
So this is my point. Yeah, and this is a
really important one. Don't settle.
Speaker 1 (19:15):
Okay.
Speaker 2 (19:17):
Also that's marriage advice as well, coming from someone who
has a few divorces, obviously, demgate relationship advice fer actually
financial yes, relationship know, but don't settle. Don't go you
know what, that's good enough for me, That's fine. Don't
that's that's lazy. No, if you can still get a
better rate somewhere else, continue on with that research and investigation.
(19:38):
Don't just stop at that, because there is still I mean,
as I've just demonstrated, you could potentially save by fifty
basis points over the course of a twenty five year
loan five years in fifty five thousand dollars and pay
for your home loan two and a half years earlier.
So hang on, don't just stop and settle at that
that you know, the fifty basis points. If you could
get it further, that discome bigot. Go go and apply it.
(20:00):
But you would accept it with gracious open arms. But
you go thank you so much. That's great, and they
will typically tend to apply it reasonably quickly, and you
don't there's not too much paperwork involt. However, you don't
necessarily stop there. You keep going and you go and
this is where you go and speak to a mortgage
broker and say, hey, they did reduce my rate, They've
(20:21):
done a good deal for me, but I'm still a
little bit irritated that they haven't matched the rate or
beat the competition.
Speaker 1 (20:27):
Okay, And is there room to move on other things
as well? Like you're calling up and you've just asked
good old Steve just for a reduction in the rate,
but say you were paying, say a mortgage package fee
or something like that, can you kind of argue to
get that down?
Speaker 2 (20:43):
Absolutely definitely. And again this is why mortgage broker is
really good because they know those finer details that they'll know, Okay,
you're paying a four hundred and fifty dollars annual fee
or you're paying this card fee. They will go in
and know those things which you may have not necessarily
thought of when you're making that conversation because you're purely
focused on, you know, the top line rate. So yes,
(21:04):
these are things that can be definitely added in, and
they're often the sort of last things that they will
add in if they think they're going to lose you.
Speaker 1 (21:11):
Okay, all right, so Steve's back. Can are you still there?
Speaker 2 (21:14):
Yes? I most definitely am.
Speaker 1 (21:16):
Look you you really have done your research, and look,
we can match the deal that you have seen elsewhere
and which will be a further twenty basis point reduction.
But you will need to give me a shout out
on your podcast.
Speaker 2 (21:36):
Step No, probably, all right, there we go.
Speaker 1 (21:38):
I'm sure they're not going to attach conditions or something
to it like that. I'm just like, oh, there's got
to be a cat to you. I'm like, no, I
don't think there would be. It would just be you
have been a loyal customer, you have done your research,
and that's the key that you have gone in there.
You've shown them what you can get elsewhere. You've established
the value of your property. You've established that you have
built up additional equity in your property, and that you
are deserving of a reduction. Other there is a chance
(22:00):
that they might lose you as a customer.
Speaker 2 (22:02):
And even if you do, hear no, if Steve I
was to go, you know, what, I'm actually going to
find it even better deal. I'm going to get in
touch with a mortgage broker and or do my own
research and find somewhere even better. Even though I've accepted
your rate, you can still the answer is still not
know because when you do go to sign with another bank,
(22:23):
your original bank will call you from the retention team
and you will have a senior management manager on the
phone asking you why are you leaving us? What can
we do to keep you? I actually had this conversation
with a bank about six weeks ago, and I spent
twenty minutes on the phone. She's like, what can we
do to keep your business? You've been with us a
(22:45):
long time. We really don't want you to go. And
it was fascinating hearing her talk. And she said, the
moment this situation is changed, we want to get you
back on board and reshift your loan back over like
it was really interesting. She was willing to do lots
of things. Unfortunately, was too little, too late. It was
(23:05):
the problem. But you know, even if you hear no,
we're not going to do that, it's not until it
comes to crunch time you'll you never know what rabbits
can be pulled out of hats by the banking institutions.
Speaker 1 (23:15):
If that conversation with good old Steve had gone in
a different direction where okay, it's come back and offered
you the fifty basis point reduction, right, and then you've said, look,
that's great, thank you very much. I accept that, but
can he go further? He goes off, comes back, and
all of a sudden he says, look, that is the
best we're going to be able to do. That is
a really competitive rate that we've offered to you in
recognition of the long time that you spent with us
(23:36):
here at the bank, and we hope that that will
be satisfactory to you. What do you say?
Speaker 2 (23:41):
Then? Again, you say thank you? And I mean that's
a huge, huge interest rate savings.
Speaker 1 (23:47):
Yeah, I did, I did. I did right by.
Speaker 2 (23:48):
You, Steve. But you still if you know that there
are better deals out there, again like, don't settle you
you you know it is your money, your life, and
you're right to the best deal possible, so accept it.
As I said, don't settle. Do research. And this is
where a mortgage broker is so helpful because they can
actually look at do a much deeper dive and they
(24:10):
actually could say, look, your credit report is not as
squeaky clean as you may have thought. You're actually on
a really good rate, and if you were to save
some money, it's actually a very very small amount of
money and not worth the hassle of moving. Or they'll
run the numbers for you. They will let you know,
and this is the value of a really good quality
mortgage broker. And you want to make sure that these
(24:31):
savings really count. And I'm going to chime in my
financial planning general advice here. When you see those mortgage
repayments reduced from your new flashy lower interest rate, if
you can make those savings count, don't let the lifestyle
creep kick in or dominate and destroy those savings. Try
if you can, if your budget allows, and obviously not
(24:52):
everyone can, and it's been very tight for all of us,
try and maintain at least some of those mortgage repayments
so you can actually see that true impact act of
your loyalty tax slashing.
Speaker 1 (25:03):
Okay, and so finishing up that phone call, you would
just accept it, and you don't actually need to kind
of say, yeah, that's great, but I reckon, I can
still get a better deal. You can just accept it
and hang up the phone and come back and have
another crack after you've done further research.
Speaker 2 (25:17):
Right exactly, except that because you want to bank those
savings straight away, you don't cut your nose off to
spain face. Fine, don't bother giving me that interests rate cut?
Speaker 1 (25:26):
I hate you, Steve.
Speaker 2 (25:29):
The back of the garden. No, take it, work with it,
build from there, and then then you've got great negotiating power.
Go to another institution going, hey, my bank charges me this.
Can you go in further with that? Because obviously it's
a tighter cut.
Speaker 1 (25:44):
Do you reckon? When your call comes into a call center,
everyone's like, Canna's calling.
Speaker 2 (25:49):
Who's February?
Speaker 1 (25:50):
They're hearing this week?
Speaker 2 (25:51):
Yeah, my number comes up on a big dashboard like flashing.
Speaker 1 (25:56):
One last final question. Because Steve has done you sent
him on stress leave now after your call? Are the
downsides to switching providers? And you kind of flagged one
of the fact that the rate might not actually be
as good as it looks, that it might be an
introductory one. But is there an any other downsides we
(26:17):
need to be aware of?
Speaker 2 (26:18):
Yes, there are lots. So sometimes you know, if you
do refinance to a new institution, or even have to
accept a certain condition of your existing bank. Sometimes they
will reduce limits if you have a large amount of
money in an officet account or a regional facility. As
part of the terms and conditions, they might say, look,
you've got all the sexist funds here, can we reduce
the limit. So this is again why a mortgage brokers
(26:40):
is very, very helpful. Also, I had a situation where
this was the refinancing call from six weeks ago. The
new internet banking is not as intuitive, it's very clunky,
it's very eighties, and it is a little bit frustrating,
but obviously the benefits are there so you and then
of course there are all those other can you know,
(27:01):
all the bells and whistles sometimes actually can end up
costing you more, but some people are happy to spend
more because it helps them stay focused and paying off
their homelan and all those wonderful budgeting tools that often
come with internet banking these days with your home and
they can be very valuable, and you can lose those insights.
So there are definitely things you can potentially disadvantages in refinancing,
(27:25):
but a mortgage broker will talk you through these things
before you sun the dotted line.
Speaker 1 (27:30):
Okay, I think we've done a fairly comprehensive job of
going through loyalty taxes. And I didn't realize I was
hoping I would get to be the customer in the sorry,
so I was not prepared to be Steve today. But look,
you know what, I think we've delivered a valuable blueprint
for those kinds of conversations. If anybody wants further information
(27:51):
from you, where do they find you?
Speaker 2 (27:54):
The best basic in contact with me is actually at
Canna Campbell Official because unfortunately in my Instagram account Sugar
ma My TV has been jammed up with the Erotic
variety messages, so I can't actually look at my inboxes.
So if you need to get a hold of me,
message me through Instagram at Canna Campbell Official, not Sugar
Mama TV because I just can't bring myself to look
(28:15):
at my inbox.
Speaker 1 (28:16):
Then alright, If.
Speaker 2 (28:17):
Anyone has any advice, let me know how to get
rid of this problem.
Speaker 1 (28:21):
Cheapers and you can hear me every day with Sean
Aylmer on Fear and Greed, daily business news for people
who make their own decisions. Thank you for listening. To
how do they afford that? Remember it hit follow on
the podcast, and the very best thing that you can
do is tell somebody else, send them the link to
this episode and spread the word about how to do
they afford that? Thank you very much for your company.
Join us again next week.
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