Home owners have been advised to negotiate their own interest rate cut with their bank following today’s decision by the Reserve Bank of Australia to lower official rates.

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.

The RBA cut official rates by one quarter of a percentage point at today’s monthly board meeting and the pressure is now on the banks and non-bank lenders to follow suit.

Ms Nielsen said customers were often in the dark about the interest they paid on their home loans and that the rate was open to negotiation, and not just a matter of waiting for the bank to lower its rates.

“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,” she said.

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

Ms Nielsen said a borrower’s best protection was to have a mortgage broker on their side. She 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.”

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.