Professional home loan packages can be a very cost effective way in which to borrow money, especially for property investors. The most significant benefit is that, in exchange for an annual fee, the borrower receives a discounted interest rate for the life of the loan, or for as long as the loan is included in the package.
Originally, professional packages were offered only by a few lenders and were available to borrowers engaged in traditionally professional occupations such as lawyers, doctors, engineers and accountants who earned at least $75,000 per annum.
Professional package products are now more common and don’t require the borrower to be employed in a particular industry, nor receive a minimum income (in most cases). In general, the only requirement is that the loan is established for a minimum amount, which can be as low as $150,000.
The specific products available in each lender’s professional packages vary, but all lenders charge an annual package fee, typically ranging from $350 to $395.
Borrowers receive discounted interest rates on a range of loans which can include variable and fixed term loans as well as lines of credit in come instances. These discounts depend on the individual loan size. For example, there may be a discount of 0.4% for loans between $150,000 and $249,999, a 0.7% discount for loans between $250,000 and $999,999.
In addition to discounts on interest rates, professional packages offer features such as 100% offset accounts, fee-free credit cards and transaction accounts, and discounted building and contents insurance premiums.
Further, multiple loans can be included under the same package with all ongoing fees covered by the one annual fee. Some lenders restrict the maximum number of loans within a package to five, whilst others have no limit. This can provide significant savings on application and valuation fees for new purchases, loan restructuring or splitting and equity access, which can be particularly useful for investors with numerous properties.
It is sometimes a mandatory requirement that a transaction account and credit card are opened at the time of application and these are included within the package. The most commonly used professional packages are:
- ANZ Breakfree
- BankWest Lite Plus
- CBA MAV Package
- NAB National Choice
- St George Advantage Home Loan Package
- Westpac Premier Advantage Package
Professional packages can provide considerable savings to those even with only one or two loans and so are often well worth considering.
If you would like to know if a professional loan package is a suitable option for youplease give us a call at Metropole Finance on 1300 782 524. An experienced mortgage broker can undertake a portfolio review to establish if a package product is a suitable option for you, or click here now to register for an obligation free consultation or just a quick phone chat.
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