Home Loan Repricing

I just saved my self Php 40,000++!!!

We all know that it’s not easy to make/save Php40,000++ in a few days’ time.

But I was able to save myself that amount from being spent just by doing some simple analysis and some good old negotiation.

I will tell you exactly how I was able to save Php40,000++

First of all this Php40,000++ is a form of savings on my part. This is with regard to my monthly amortization for my condo unit.

I was in the midst of another yearly repricing (interest change) for my home loan, when I decided to check out other bank’s offerings in home loan refinancing.

Luckily there’s a promo for home loan refinancing from HSBC. They were offering free administration fees of up to 1% of the total loan amount! That means that I only have to pay a few thousand pesos if even I want to transfer my loan to them. But, that’s not all, they were offering extremely low interest rates as to the one I currently have on my BPI home loan….

The HSBC home refinancing scheme was giving out the following rates:

4.99% fixed for one year 
6.24% fixed for 3 years 
6.49% fixed for 5 years 

Imagine that! I was paying an interest rate of 7.5% in BPI and there was HSBC giving out free administration transfer fees and low interest rates!

And so my journey to saving Php40,000++ has begun!

I hurriedly contacted HSBC about the promo they have and true enough it is still on.

A friendly HSBC loan officer contacted my right away and gave me full details.

I was about to send all my requirements for them to start my application when I thought of negotiating with BPI my current rates….

And so my negotiations for a better rate has begun!

I contacted my loan officer to inquire about rates adjustment options, who then gave me a number to contact.

Someone from the line answered and told me to email them regarding my inquiry.

I then emailed them my case which they swiftly replied to.

TIP: let them know that the other bank is offering the free transfer fees and lower rates!!! If needed, attach the email from your contact from the other bank!

The consumer loan officer replied right back to me regarding rate readjustments, and offered me:

“We may request for approval to grant you our lowest possible rates for existing loans as follows: 

6.50% - yearly re-pricing 
7.00% - fixed for 2-3 years 
7.50% - fixed for 4-5 years “

The rates provided were terrible comparing to the one provided by HSBC!

I then replied to his email and attached the rates from HSBC and asking them if they can give me the same rates….

Alas, they replied with:

“6.50% is already the lowest possible rate and we can not go any lower than this.”

I was ready to get their 6.5% yearly re-pricing rate when I thought of giving it another push and try to haggle for a better rate!

I asked them if they could give me any of the two options I wanted, all the time giving them the impression that I was ready to move to HSBC if they didn’t give my requested rates!

“As a loyal BPI customer, I really want to have my loan standing in BPI. 
However, with the offering of lower rates by other banks, I am really considering to move my loan. 

With that, could we please request for lower rates, perhaps at  

6.25% fixed for 3 years  
6.5% fixed for 5 years 

Please let me know if this is approved. “

I think with the last push I made, I was able to convince them that I will really move my loan to the other bank. Remember that our loan interests are the bread and butter of banks that is why they wouldn’t want to lose customers to other banks.

The next thing I received from the officer was that he would escalate my request to higher managers, and asked me to be patient because it would take around 10 days to process.

And so I waited anxiously about the approval or disapproval of my request.

Would I have to move my loan to HSBC and adjust my payment methods for my loan?

Or would BPI give me better rates to work with and stay as a loyal customer to them?

The wait was long and it took more than 10 days too!!!

After more than 15 days of waiting, the officer replied to the email thread and said:

“The Management has just approved  the applicable rate for your loan at 6.50% effective 09/12/2015 (starting 10/12/2015) until 09/12/2018 with Php 3,000.00 processing fee.”

That is effectively 6.5% interest rate for 3 years fixed!!!

Using a simple amortization calculator, I computed that I will be able to save around Php1,150 monthly for three years which equates to a whopping Php41,400!!!

I am thrilled to have saved myself that huge amount!

More than the amount I am really happy to have exercised my negotiation skills and a little bit of financial savviness to my advantage.

And so for anyone who would want to have their loans repriced, try these steps and who knows you might just save yourself a large amount of interest charges!

If you want more tips you may email me or comment below to start a discussion! Good Luck!