A package home loan can be great value for some borrowers with competitive interest rates, free credit cards and discounted insurance. See what’s on offer…
With big rate discounts on offer, it’s not surprising that package loans make up a large proportion of home loan business written by the banks.
Combining your home loan and other commonly-used financial products into one bundle can potentially have some great benefits, if you can justify the annual fee that is charged for the package. This annual fee typically costs around $300 to $400 per annum and replaces the separate account-keeping fees that you might otherwise pay on each product.
The burning question is, do the interest rate savings and discounted products compensate for this higher fee?
The short answer is yes for some borrowers, particularly if you are borrowing in excess of $250,000 and utilising the included products. The annual fee is fixed so the larger the mortgage, the lower the impact this fee will have on overall cost.
Home loan package drawcards
The main drawcards of a package home loan can include:
A standard variable mortgage, potentially at a lower interst rate than a no-frills mortgage
Free transaction account
Free credit card
Discounted general insurance options (e.g. home and contents, landlord and car insurance)
Discounted risk insurance options (e.g. life, TPD, trauma and income protection insurance)
Discounted financial planning and share trading.
However, it can also offer loan flexibility and features that are hard to measure in dollar terms.
So is a package home loan for me?
If you’re new to the home loan game, you’re likely to be dazzled by lenders’ advertised interest rates, not realising that other factors may come into play as the years go on.
For instance, if you pay extra into a cheap ‘no-frills’ loan and want to access that money, you may have to pay a fee every time. You may not be able to deposit a lump sum such as a tax return into the loan. You may not be able to get the loan paid out earlier by managing your money through an offset account, you may have to pay to switch from variable interest to fixed, and the list goes on.
Everyone’s personal situation is different, but if you are borrowing above $250,000, upgrading to a package with its fully featured home loan could be worth consideration.
Admittedly there are some people who just want the cheapest loan they can find and would not use a credit card and transaction account included in a package, or the discounted insurance products. If that’s the case, the benefits of a package deal might not be as appealing.
Low Rate Home Loan Packages On Offer
As at the 21st of June 2016, below are owner-occupier package home loans with the current lowest advertised+comparison rates on the CANSTAR database for standard variable, one year fixed, two year fixed and three year fixed package home loans (based on a loan amount of $500,000). Please note that these rates don’t take into account your loan-to-value ratio or credit history, so not everyone can qualify for the minimum advertised rate.
Variable Packaged Home Loans
You can find these Home Loan Packages on our comparison tables – click to check ratings, fees and features.
Table 1: Low-Rate Variable Packaged Home Loans
Company
Product
Advertised Rate
Comparison Rate*
Newcastle Permanent
Premium Plus Package Premium Variable 500-749k
3.74%
4.12%*
HSBC
Premier Variable 500-749k
3.85%
4.27%*
HSBC
Premier Home Smart 500-749k
3.85%
4.27%*
Bank of Sydney
Expect More Variable 100k+
3.88%
4.28%*
Gateway Credit Union
Premium Variable 150k+
3.89%
4.19%*
ME Bank
Member Package Flexible Home Loan OO Max 80 LVR 40
3.89%
4.28%*
Victoria Teachers Mutual Bank
First Home Buyers Package Standard Variable OO 80
3.94%
3.95%*
ING DIRECT
Orange Advantage Orange Advantage Variable 80% 50
3.94%
4.16%*
Heritage Bank
Home Advantage Variable 250-699k
3.94%
4.24%*
Victoria Teachers Mutual Bank
Education Package Home Loan Standard Variable OO
3.94%
4.26%*
G&C Mutual Bank
Premium Package Premium 300k+
3.99%
4.36%*
SCU
My Life Variable Rate Package 500k+
3.99%
4.37%*
Source: www.canstar.com.au. Correct as at: 21st of June 2016
Based on $500,000 loan amount and 80% LVR. Products listed on Canstar database
*Comparison rate is based on $150,000 loan amount and 25 years loan period. The products are sorted by the advertised rate and the comparison rate.
1 Year Fixed Packaged Home Loans
You can find these Home Loan Packages on our comparison tables – click to check ratings, fees and features.
Table 2: Low rate 1 Year Fixed Packaged Home Loans
Company
Product
Advertised Rate
Comparison Rate*
Newcastle Permanent
Premium Plus Package Residential Fixed 1 yr
3.59%
5.26%*
Gateway Credit Union
Premium Fixed Package 1 yr 150k+
3.79%
4.73%*
BankVic
Premium Home Fixed 1 yr 50k+
3.95%
4.82%*
Victoria Teachers Mutual Bank
First Home Buyers Package Standard Fixed – Owner O
3.99%
3.95%*
Victoria Teachers Mutual Bank
Education Package Home Loan Standard Fixed – Owner
3.99%
4.27%*
ME Bank
Member Package Flexible Fixed OO Max 80 LVR 1 yr 4
3.99%
4.29%*
Horizon Credit Union
Platinum Loan Residential Fixed 1 yr 80% 150k+
3.99%
4.68%*
ECU Australia
Premium Plus Standard Fixed 1 yr
3.99%
4.99%*
Source: www.canstar.com.au. Correct as at: 21st of June 2016
Based on $500,000 loan amount and 80% LVR. Products on Canstar database
*Comparison rate is based on $150,000 loan amount and 25 years loan period. The products are sorted by the advertised rate and the comparison rate.
2 Year Fixed Packaged Home Loans
You can find these Home Loan Packages on our comparison tables – click to check ratings, fees and features.
Table 3: Low rate 2 Year Fixed Packaged Home Loans
Company
Product
Advertised Rate
Comparison Rate*
Newcastle Permanent
Premium Plus Package Residential Fixed 2 yrs
3.64%
5.14%*
Suncorp Bank
Home Package Plus Special Fixed Owner Occupied 2 y
3.74%
4.76%*
ANZ
Breakfree Residential Fixed 2 yrs 150k+
3.75%
5.03%*
BankVic
Premium Home Fixed 2 yrs 50k+
3.77%
4.72%*
People’s Choice Credit Union
Home Loan Package Fixed 80 LVR Offer 2 yrs 20k+
3.85%
4.44%*
Bank Australia
Premium Fixed Package Residential Fixed 2 yrs 10k+
3.85%
4.51%*
NAB (Exclusive to Brokers)
Homeplus Package Homeplus Fixed Rate PI 2 yrs 100k
3.89%
4.62%*
Gateway Credit Union
Premium Fixed Package 2 yrs 150k+
3.89%
4.69%*
NAB
Choice Package Standard Fixed 2 yrs 150k+
3.89%
4.97%*
Westpac
Premier Advantage Discounted Fixed Options 2 yrs 1
3.89%
4.99%*
NAB
Private Tailored Pkg Standard Fixed 2 yrs 150k+
3.89%
5.29%*
Suncorp Bank
Home Package Plus Owner Occupied Fixed 2 yrs 150k+
3.94%
4.80%*
Source: www.canstar.com.au. Correct as at: 21st of June 2016
Based on $500,000 loan amount and 80% LVR. Products on Canstar database
*Comparison rate is based on $150,000 loan amount and 25 years loan period. The products are sorted by the advertised rate and the comparison rate.
3 Year Fixed Packaged Home Loans
You can find these Home Loan Packages on our comparison tables – click to check ratings, fees and features.
Table 4: Low rate 3 Year Fixed Packaged Home Loans
Company
Product
Advertised Rate
Comparison Rate*
The Rock
Rockstar Package Residential Fixed 3 yrs 80% 150k+
3.74%
4.64%*
Bank of Sydney
Expect More Residential Fixed 3 yrs 100k+
3.88%
4.28%*
ME Bank
Member Package Flexible Fixed OO Max 80 LVR 3 yrs
3.89%
4.28%*
IMB
Platinum Package Residential Fixed 3 yrs 90% 150k+
3.89%
5.07%*
Newcastle Permanent
Premium Plus Package Residential Fixed 3 yrs
3.89%
5.09%*
SCU
My Life Residential Fixed 3 yrs 150k+
3.95%
4.50%*
ING DIRECT
Orange Advantage Residential Fixed 3 yrs 150k+
3.98%
4.30%*
Source: www.canstar.com.au. Correct as at: 21st of June 2016
Based on $500,000 loan amount and 80% LVR. Products on Canstar database
Comparison rate is based on $150,000 loan amount and 25 years loan period. The products are sorted by the advertised rate and the comparison rate.
See for yourself. Compare Home Loans.
CANSTAR is an information provider and in giving you product information CANSTAR is not making any suggestion or recommendation about a particular credit product. If you decided to apply for a home loan, you will deal directly with a financial institution, and not with CANSTAR. Rates and product information should be confirmed with the relevant financial institution. For more information, read our detailed disclosure, important notes and additional information. *Read the Comparison Rate Warning.
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