I just made 137,500 CZK for one hour’s work. It beat my previous record of 45,000 CZK per hour.
This was my part of a reduction in interest rate I was able to negotiate on a Canadian property I am co-owner in.
Our Canadian dollar equivalent of a 26,000,000 CZK mortgage came up for renewal and one simple email negotiation with the bank resulted in savings to our company of over 550,000 CZK over the 5 year period we fixed the mortgage for. My 25% share of the savings was 137,500 CZK.
One hour’s email negotiation on our mortgage saved us over 500,000 CZK.
Negotiating your interest rates is one of the easiest but most often overlooked ways that property investors can improve the return on their property.
First of all, the investor has to realize that the first offer for interest rates at renewal is always higher than market rates.
Here is the template I used and hundreds of our clients have used over the last years resulting in a consistent reduction of 0.5% to 1.5% of the interest rates from the bank’s initial offer.
Write an email response to the mortgage provider’s renewal offer with the gist of the following:
“Many thanks for the proposed rates. We were honestly disappointed to see the proposed rates were so high. We would like to draw your attention to the following:
1. We are good clients and have never been in default on the mortgage(s) we hold with your bank
2. I can easily go to another bank and my broker told me what kind of rates I could expect. For example, at the moment XXXXXX bank offered an interest rate of X% for X years for my property. I would really expect that your offer would be similar.
3. I may start/will start/am looking at additional investment opportunities and although I have had a good experience with your bank in the past I would seriously look at alternatives if I felt I was not getting competitive offers. I could possibly move my existing mortgage(s) to another provider.
I would therefore be grateful if you review your proposed offer and get back to me. “
What else is required of you?
1. Investigate your mortgage options realistically with a mortgage broker beforehand
2. Pay all your mortgage, loans and contracts (ie. internet or mobile providers) fully and on time. Otherwise you risk being entered into national databases of debtors which means no other bank will touch you.