Product Insights: Professional Packages

By Matt McCombe

In my last finance blog, I wrote about the features, benefits and draw backs of Basic Variable Rate Home Loans. Today I’d like to take a look at Professional Packages which sound pretty fancy but can be explained quite simply.

Most banks have a version of a Professional Package (Pro-Pack). Some examples you might have heard of are “Premier Advantage Package”, “Mortgage Advantage Package”, “Wealth Package” or “Money Manager Package”. Although the names vary, the cornerstone features of the packages don’t vary much across the different lenders. Most include the following:

1) A discount off the Standard Variable Rate (SVR) Home Loan of up to 0.7%
2) No Application Fee for a number of home loans
3) Offset Account if a SVR is taken
4) Some offer a discount off Fixed Rate Home Loans
5) Free Credit Card
6) Sometimes a free transaction account

What does it cost for the privilege of having a Pro-Pack? Between $300 and $400 per year, depending on the bank.

As you can see, the annual fee can be worth it if you make use of what the Pro-Pack offers.

For example, if you use an offset account and a credit card it’s highly likely that you will get good value from a Pro-Pack because the sum of an average credit card fee and the savings you are likely to make from an offset account will exceed the annual fee.

Another example of how a Pro-Pack can be worthwhile is if you have more than one loan account. This can be the result of having a home loan for an investment property and a home loan for your own home. It can also be the result of wanting to set up your home loan with part variable rate and part fixed rate.
There are always exceptions to the rule but this will hopefully help you understand this type of loan.

If you have any questions about mortgages, please be in touch! You can contact me by email on matt@extrememortgages.com.au or by phone on (08) 9400 6310.

Stay tuned for next week’s instalment!