Why High-Value Borrowers Often Qualify for Better Home Loan Rates
In Australia’s fiercely competitive lending market, not all borrowers are treated equally — and high-value borrowers often come out ahead. These borrowers frequently score better home loan rates, discounted fees, and access to premium loan features, all because lenders view them as low-risk, high-reward clients.
But why exactly do lenders roll out the red carpet for this group? And how can you position yourself to take advantage of these benefits?
In this article, we’ll break down why high-value borrowers receive preferential treatment, how lenders define “high-value,” and practical strategies you can use to qualify for better home loan rates.
Who Are High-Value Borrowers?
A high-value borrower is someone whose financial profile makes them highly attractive to lenders. There’s no fixed dollar figure or income level that universally applies, but in the Australian context, high-value borrowers typically meet one or more of the following criteria:
- Borrowing large loan amounts, often over $750,000
- Strong financial position, such as a high income and low debt-to-income (DTI) ratio
- Excellent credit score
- Large deposit or significant equity, translating to a low loan-to-value ratio (LVR)
These borrowers represent an appealing mix of low risk and high profitability for banks, making them prime candidates for competitive offers.
Why Lenders Favour High-Value Borrowers
1. Reduced Risk of Default
Lenders are in the business of managing risk, and high-value borrowers tend to tick all the right boxes:
- High income means the borrower can comfortably cover repayments, even if economic conditions worsen.
- Large deposits or equity lower the lender’s exposure, as the borrower has more “skin in the game.”
- Strong credit history signals reliability and past financial discipline.
All of this reduces the likelihood of missed repayments or defaults, making high-value borrowers a safer bet.
2. Economies of Scale
Bigger loans mean bigger profits. For example, a $1,000,000 mortgage generates twice the interest income of a $500,000 loan — often with no doubling of the bank’s operating costs. This margin gives lenders room to offer:
- Lower interest rates
- Waived or reduced fees
- Premium service options
In short, it’s worth it for the lender to make these clients happy.
3. Portfolio Diversification
Many high-value borrowers are not just purchasing a single home — they’re also investors with multiple properties. By serving these clients, lenders can diversify their mortgage portfolios across:
- Owner-occupied properties
- Investment properties
- Commercial assets
This helps balance the bank’s risk and maintain stable income streams across different market sectors.
4. Competitive Pressure in the Market
In Australia, banks and non-bank lenders fiercely compete for the business of high-value borrowers. To win and keep their business, lenders often offer:
- Discounted rates
- Fee waivers
- Loyalty incentives
- Access to relationship managers
For borrowers, this competition creates an opportunity to negotiate better terms.
How High-Value Borrowers Benefit
1. Lower Interest Rates
A small rate reduction on a large loan can translate into major savings.
Example:
Loan amount: $1,000,000
Loan term: 25 years
| Interest Rate | Monthly Repayment | Total Interest Paid |
| 4.5% | $5,560 | $668,327 |
| 4.2% | $5,418 | $625,371 |
In this example, a 0.3% discount saves $42,956 in interest over the life of the loan.
2. Waived or Reduced Fees
Lenders may waive:
- Loan establishment fees
- Ongoing account-keeping fees
- Valuation fees
These perks can save you thousands upfront and hundreds per year.
3. Premium Loan Features
High-value borrowers often get access to:
- Multiple offset accounts
- Flexible repayment options, including unlimited extra repayments
- Dedicated relationship managers for personalised service
These features can improve both the financial and customer experience.
4. Loyalty and Bundling Incentives
Lenders love “sticky” customers — borrowers who also open savings accounts, credit cards, or insurance products. High-value borrowers are more likely to be offered:
- Rate discounts for bundling products
- Cashback offers on refinance deals
- Waived fees on related financial products
How Lenders Assess High-Value Borrowers
1. Loan Amount
While thresholds vary, loans above $750,000 often qualify as “high-value.” The bigger the loan, the more eager the lender is to compete for your business.
2. Loan-to-Value Ratio (LVR)
An LVR of 80% or lower is a major plus because it reduces the lender’s risk and eliminates the need for costly Lenders Mortgage Insurance (LMI).
3. Income and Debt-to-Income Ratio (DTI)
Lenders want borrowers with strong incomes relative to their debts. A low DTI signals that you can comfortably handle repayments, making you a more appealing customer.
4. Credit Score
A credit score above 800 shows excellent repayment history, no red flags, and a responsible approach to debt.
5. Property Portfolio (for Investors)
If you own or are building a portfolio of investment properties, your experience and track record can boost your attractiveness to lenders.
Strategies to Qualify as a High-Value Borrower
Even if you’re not quite there yet, here’s how you can position yourself for better deals.
1. Build a Bigger Deposit
Aiming for at least 20% of the property value can help you:
- Lower your LVR
- Avoid LMI
- Access sharper rates
2. Improve Your Credit Score
Simple but effective steps include:
- Paying bills and credit cards on time
- Reducing your credit utilisation
- Limiting new credit enquiries
- Regularly reviewing your credit report for errors
3. Reduce Your DTI
Pay off high-interest debts like credit cards and personal loans to reduce your DTI and boost your borrowing profile.
4. Use Existing Equity
If you own property, consider leveraging your built-up equity to negotiate better rates on new loans or refinancing deals.
5. Shop Around and Negotiate
Use comparison websites and mortgage brokers to access a wide range of lenders. Don’t be shy about negotiating — high-value borrowers are in demand, and many lenders are willing to offer better terms to win your business.
6. Bundle Financial Products
Ask about discounts for bundling your home loan with other banking products like offset accounts, credit cards, or insurance policies.
The Role of Mortgage Brokers
Mortgage brokers can be an invaluable ally for high-value borrowers. Brokers:
- Have access to a broad lender network
- Know which lenders offer the best rates for large loans
- Can negotiate discounts on your behalf
- Help tailor loan products to your specific needs
If you’re a high-value borrower or close to becoming one, a broker can often help you unlock deals you might not access on your own.
Real-World Example: High-Value Advantage
James and Sarah are buying a $2,000,000 home with a $500,000 deposit, leaving them with a $1,500,000 loan at a 75% LVR. Their combined income is $400,000, and they have excellent credit scores.
Lender offers:
- Lender A: 4.8% interest, no fees
- Lender B: 4.5% interest, $500 annual fee
James and Sarah choose Lender B, as the 0.3% lower rate saves them $67,500 in interest over 25 years — far exceeding the cost of the annual fee.
Final Thoughts: How to Leverage Your High-Value Status
In Australia’s mortgage market, high-value borrowers hold a strong negotiating position. Their combination of low risk and high profitability makes them highly sought-after by lenders, opening the door to better rates, waived fees, and premium service.
By understanding what lenders look for — and actively improving your borrowing profile — you can position yourself to access the best available deals. Whether you’re buying your dream home or expanding an investment portfolio, knowing how to leverage your high-value status can save you thousands and provide valuable financial flexibility.
If you’re unsure where to start, consulting a mortgage broker is one of the smartest moves you can make. With their market insights and lender connections, brokers can help you maximise your advantage and secure a home loan that fits your goals.
