Many lenders offer competitive ‘packaged products’ or ‘pro packs’ which are available only to those borrowers who meet specific criteria. These products began as ‘professional packages’ as lenders targeted specific professions which were seen as high income and low risk. Professional packages were also a good marketing ploy as lenders would do deals through professional bodies which would then let their membership know of the special deals.
Today most lenders focus more on minimum loan amounts and earnings profiles in their targeting of these packages rather than targeting specific professions.
Typically borrowers for these products will borrow over $250,000 and really improve on deals over $750,000. You have to be careful not to get caught up in the hype of platinum credit cards and ‘private bankers’ – many lending staff refer to propacks as ‘egopacks’. A big discount is only relevant when you compare it to the bottom line of other products. For example at time of writing a 0.80% from ANZ is not as good as a 0.16% discount from ING because ING’s base lending rate is so much lower than ANZ’s – as your broker we will tray and keep your feet on the ground.
You also need to keep the annual fee in perspective – it is almost irrelevant where you have 5 loan accounts totaling $750,000 +, an offset account, a credit card etc. However if you are only borrowing $250,000 for a single home loan ie: no split accounts then the $395 represents 0.16% on top of the discounted rate – that makes ING’s loan with no fees an even better proposition.
However for some borrowers professional packages offer real and substantial benefits and saving with more home loans features at basic variable rate prices. The features can include any or all of the following:
Some professional packages are simply highly optioned home loans with lower interest rates and (usually) slightly higher fees and some ‘fringe benefits’ like a free credit card and cheap house insurance. Others are packaged products in which the borrower typically pays a global package fee – usually around $350 per year. For this the borrower gets a range of banking services including several home loan accounts and personal accounts for themselves and their partners. This approach looks expensive, but can make a lot of sense if the borrower requires multiple accounts for convenience and tax purposes. This will generally be the case if one home loan is financing the home and others loan accounts are financing investments.