You can save up to $5000 a year on your home mortgage by simply pestering your bank for a discount.

Most will buckle.  But just in case, you can switch to a lower priced competitor.

The powerful Australian Competition and Consumer Commission recommends the technique – and since they have negotiated with some of Australia’s biggest organisations, they should know.

“By asking a bank for a lower rate, refinancing to another home loan or switching lenders, this could result in interest savings of nearly $5000 in the first year alone for an average-sized new loan of $386,000,” the commission says.

“It is worth ringing up your bank every year to get a better deal and it’s worth threatening to move or moving to another lender,” recommends Rod Sims, the chairman of ACCC.

Mr Sims explained that there is a “huge lack of mortgage price transparency” and below-the-radar discounts for new home loans, making it hard for borrowers to compare interest rates.

In the ACCC’s interim report on home loan pricing, there were “signs of oligopoly behaviour and a lack of vigorous price competition among the big four banks” which often focused on each other, without giving much regard to smaller competitors.

Both the Treasurer Josh Frydenberg and the RBA Governor Philip Lowe were critical of banks for failing to pass on the reduction in bank funding costs including money sourced from international markets and the slashing of the RBA cash rate three times to 0.75 per cent last year.

The cash rate is now at a record low 0.25 per cent.

The ACCC report, commissioned by the Treasurer, found that it does not pay to be loyal to a bank.

Borrowers who have been with their bank for more than five years, pay on average 0.40 of a percentage point more than a new customer.

“The longer you stay with the bank, the more you pay,” Mr Sims said.

“For every $200,000 on your loan that 40 basis points is worth $850 a year, so it really matters. I’m not saying banks are doing anything wrong, but if you’re loyal to your bank, you’re paying more than you need to,” Mr Sims told the Australian Financial Review.

The average interest rate difference between a new borrower and an existing one is about 0.26 of a percentage point.

The report found that 90 per cent of the big four bank customers received some sort of discount off the variable rate.

About 13 per cent of customers got a discount of 1.5 percentage points and another 11 per cent of borrowers received no discount at all.

Mr Frydenberg urged borrowers to remain highly engaged and “shop around to get access to the best deal, including from their existing financial institution.”

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