Go back a decade or so and discounts on standard variable home loans rates were something that were offered to a selected few. Accountants, doctors and lawyers were among th elite that qualified and they tended to be targeted directly through their membership of professional associations. The average borrower often wasn’t aware such discounts existed or if they were not able to benefit from them.
However, that has changed in recent years. These days professional packages are available to a far bigger group of borrowers.
The Many Benefits of Professional’s Loan Package
Along with the changes in the target market, there have been changes in the way the product is structured. These days, they come with a range of benefits on top of the discount on the standard variable rate.
In addition to the interest rate discounted, there are usually discounted or zero application fees and ongoing administration fees on the home loan.
Also, fees may be discounted or waived on other products and services such as transaction accounts, credit cards, personal loans, margin loans or insurance.
Some lenders will charge an annual fee, typically $300, for the overall package so you need to be fairly sure that you will use at least some of the discounted products offered as part of the package.
In some cases, borrowers may be better off taking out a basic loan. The interest rate would be about the same and they wouldn’t be paying for add-ons that they are not going to use.
While eligibility for these products is far broader than it used to be, some lenders still place ‘professional’ restrictions on who may borrow by having products specifically for members of professional associations. However, nowadays, the eligibility criteria is based either on income or loan size, where in both cases, the bigger the better the discount.
Professional packages generally offer discounts of 0.5 per cent off lenders’ standard variable interest rate and up to 0.25 per cent off fixed interests rates.
If you already have a large home loan with a particular institution and you are not receiving the benefits of a professional package, it is worth making an enquiry with one of our mortgage brokers today.