A Home Loan Package is a home loan bundled with other financial or banking services and products with the main attractive feature usually being an included discount on the home loan interest rate. At the time of this writing, the interest rate reduction was around 0.8% to 1.4% for a variable rate home loan.

Examples of bundled products and services with the home loan may include

• A reduced interest rate
• Offset accounts
• Redraws on Home Loan account
• Optional credit cards (with annual fee often waived)
• Transactional or savings accounts (usually with fees waived or reduced)
• Free or discounted home loan application
• Free or discounted property valuation
• Discounts on Home & Contents insurance, Car Insurance and/or Landlord Insurance
• Discounts on products like Life Insurance, Trauma cover, TPD Cover and Income Protection
• Discount on Financial Planning services

Annual Fee

There is normally an annual fee associated with a Home Loan Package of around $400. The reduced interest rate normally more than covers the annual fee.

Savings

For most, it’s the reduction in the Home Loan interest rate that is most attractive about the Home Loan Package. The reduced interest rate normally more than covers the annual fee and could save you $1000s of dollars in interest in the early years of the loan.

To determine whether a home loan package will genuinely save you money or even the total amount of savings, it’s important to look at all the features and products included in the home loan package. Don’t just look at the reduced fee offered for a product or service included in the home loan package. Shop around across different financial institutions for a similar and comparable product and compare the prices. General insurance and risk insurance are good example of products that you shop around and carefully compare to your personal requirements.

Minimum Loan Amount

Normally the home loan package will have an initial minimum loan amount. As a guide, this is usually around $150,000.