Should I get a professional package home loan?

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Cindy Woo
Posts: 47
Joined: Thu Jun 27, 2013 4:47 pm

Should I get a professional package home loan?

Post by Cindy Woo »

Hello brokers,

I have been eyeing a 3 bedroom house in Toongabbie, NSW which is priced at $600,000. I have looked at the area and I am pretty sure that I can find tenants easily to move into the house within a few months of purchase.

What I need is some advice regarding professional packages, basically should I go for one or not? The home that I live in currently was inherited from my parents so this is my first home loan / investment loan.

Much appreciated!

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Otto Dargan
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Re: Should I get a professional package home loan?

Post by Otto Dargan »

Hi and welcome to the forums Cindy Woo,

A professional package home loan is basically where you pay an extra fee in exchange for a range of premium services and discounts on the lender’s services.

The fee for a professional package can range from $300 to $750 and is only paid once a year. This also means that you will not be charged any other hidden or ongoing fees.

Depending on the lender that you apply with you can hope to get a 0.5% to 0.9% discount on the variable rates. If you want a fixed rate then you can get a discount of up to 0.25% on your fixed rates. If you are borrowing more than $750,000 or even $1 million then the lenders may increase the discount on your loan rates.

Aside from the interest rate discounts a professional package loan will also entitle you to a discount on the lender’s other products. These include home insurance, personal insurance and financial planning services. Lenders can also offer borrowers discounts on personal loans, margin loans and share market trading. Depending on the lender you can also get a free offset account which can help you reduce your interest even more.

Can you tell us how much would you be borrowing to buy the house?

Cheers,
Otto
Otto Dargan
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P | 1300 889 743
Home Loan Experts

Cindy Woo
Posts: 47
Joined: Thu Jun 27, 2013 4:47 pm

Re: Should I get a professional package home loan?

Post by Cindy Woo »

I have about $100,000 in my bank account which I will be using for the deposit. Anyway I want to borrow less so that I can finish paying off the loan faster. I also earn about $90,000 a year so I think I should be able to afford the payments every month.

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Otto Dargan
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Re: Should I get a professional package home loan?

Post by Otto Dargan »

Hi Cindy Woo,

The reason why I asked you about your loan amount is because professional packages are most suitable for someone who is borrowing $500,000 and more. This is because lenders will give you a larger discount if your loan amount is also large. Usually if you are borrowing less than $250,000 then a professional package may not be very suitable.

In any case if you are wondering about how much you would have to pay every month you can find out using our Loan Repayment Calculator.

For the rate use the bank standard variable rate (BSVR) with a 0.7% discount. You can also try increasing it by 1.5% to see the amount in case the interest rates go up. For the loan term you can use 30 years which is the average although you can go up to 40 years as well.

If you would like more help finding a suitable lender for your investment loan then you can contact us on 1300 889 743. You can also send us a free online enquiry.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

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otea
Posts: 65
Joined: Wed Mar 31, 2010 10:35 am

Re: Should I get a professional package home loan?

Post by otea »

Hi I’m also thinking of going for a professional package loan for my investment. I am thinking of buying a unit near a university and renting it out to international students.

You mentioned above about an offset account which reduces costs?

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Otto Dargan
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Re: Should I get a professional package home loan?

Post by Otto Dargan »

Hi Otea,

An offset account reduces your overall loan costs by reducing the interest of your loan repayments.

Once you set up an offset account and link to your loan account, you can then deposit any money into your offset account. What happens now is your interest payable will be calculated by taking your loan amount after deducting the deposit.

Let’s say that you got a loan of $500,000 you deposited $50,000 into your offset account. Now the lender will charge you interest as if you owed them $450,000 only and not $500,000.

As you can see, you are saving by not paying interest on $50,000.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

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otea
Posts: 65
Joined: Wed Mar 31, 2010 10:35 am

Re: Should I get a professional package home loan?

Post by otea »

So which banks can I get a professional package loan from then? Are you guys allowed to mention this?

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Otto Dargan
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Re: Should I get a professional package home loan?

Post by Otto Dargan »

Otea, you can get a professional package from these major lenders although they may have different names, fees and rates:
  • CBA – MAV package line of credit / MAV standard variable OR Wealth Package
  • Rams – Line of credit professional package / Smartway professional package
  • Westpac – Premier advantage rocket repay home loan and investment loan
  • St. George – Advantage home loan package portfolio loan / Advantage home loan package standard variable rate home loan
  • Suncorp – Money manager standard variable / Money manager asset line
  • ANZ – Professional benefits package standard variable / Breakfree package standard variable
  • NAB – Tailored home loan under the choice package
  • Etc.
Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

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