Home owners have been advised to get on the front foot and negotiate their own interest rate cut with their bank rather than wait for a decision on official rates from the Reserve Bank of Australia.

Jennifer Nielsen, Chief Executive Officer of Loan Market Group, incorporating Loan Market Home Finance and X Inc Finance, said there was nothing to stop customers from being pro-active about their home mortgage rate.

“You don’t have to wait for the Reserve Bank’s monthly board meeting,” Ms Nielsen said.

“Amazingly, our mortgage brokers find that around six out of every 10 mortgage holders don’t actually know what interest rate they are paying. And that means many are paying more than they need to.

“Don’t sit around and wait to be told what to pay. Make sure you are getting the best deal possible from today,” she said.

The RBA is expected to cut official rates by at least one quarter of a percentage point following its next board meeting on September 2.

The central bank increased rates twice this year in a bid to control inflation. The rate rises have contributed to a slowdown in the once booming national economy.

Although a reprieve is expected from the RBA, there’s no guarantee all the major banks will pass on any rate cut despite warnings from federal Treasurer Wayne Swan.

But Ms Nielsen said customers were not only entitled to seek a deal from their bank, but they should take more control of their finances.

“It is important for borrowers to keep assessing their position and ensure they are getting the best deal possible on their home loan,” she said.

“As Wayne Swan has said in the past, if borrowers are unhappy with the deal they are getting they can, and should, vote with their feet.”

Ms Nielsen said while switching lenders can be expensive due to costly exit fees, it was still a competitive lending market and banks were keen to keep existing customers. That means people should negotiate with their own bank first.

She said a borrower’s best protection was to have a mortgage broker on their side. Ms Nielsen said it was common for people who don’t feel comfortable negotiating to have a mortgage broker act on their behalf.

“A broker is best placed to advise clients on their options with major banks and a range of non-bank lenders,” she said.

“They can assess the various deals on variable mortgage rates and advise on whether it’s possible to get or move to a cheaper rate.”