Package deals are as the name suggests bundle more than one financial product into the home loan. It could be as simple as the addition of an offset account, savings account, or credit card, They might also have reduced fees in addition to discounts on items like share trading, insurance policies or financial planning sessions.
The aim of the game is so all your banking needs are in one neat package with one lender. This is convenient for you, and also a winner for the lender. If it comes time to refinance the home loan it may be more difficult to unwind that product because so many other products come bundled in.
The problem for consumers is that although the rates may seem attractive, they may not be the best home loan rates available. And the packaged products like credit cards and savings accounts may also not have the best rates available.
You may find yourself not making use of a product that attracts fees - such as a credit card - which if not managed correctly can end up costing a lot more in the long run. Plus, it's hard to compare different packages across different institutions when they are packaged in slightly different ways.
Lenders offering packaged home loans
Three of the four major banks offer packaged home loans with various inclusions, along with a host of smaller banks and lenders. ANZ closed its Breakfree package offer to new customers in early 2022.
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Commonwealth Bank
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Westpac
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NAB
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AMP
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Australian Unity
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Auswide Bank
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Bank Australia
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Bank of Sydney
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Beyond Bank
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Community First Bank
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Credit Union SA
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First Option Bank
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Greater Bank
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HSBC
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Gateway Bank
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Illawarra Credit Union
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Macquarie Bank
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ME Bank
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Newcastle Permanent
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QBank
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RAMS
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Suncorp
This list may not be exhaustive.
Is a home loan package cheaper than a home loan with no package?
The answer to this depends on the details of the products in the package. For borrowers the trick is to consider which products suit your needs.
Signing up to financial products just because they are offered as part of a package deal with your home loan could leave you with unwanted credit cards or accounts that could potentially add to your expenses.
You will not only have to compare the home loan interest rate, but also the comparison rate and annual package fees. Other products' fees to keep an eye out for include:
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Credit card annual fees, and interest rates if you have a balance.
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Bank account keeping fees.
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Uncompetitive fees or interest rates on other products such as car loans, personal loans, and share trading.
So while it's great to get a discount and a package deal discount sounds awesome, comparing the cost of a package deal requires you to compare the cost of each individual product with others in that market.
Photo by Thought Catalog on Unsplash
