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Banks offer home loan discounts for certain professionals

When looking for the best home loan, there are many options you should consider. This includes fixed-rate and variable-rate loans, different loan terms, and the benefits of using a mortgage broker. Another option that is becoming increasingly popular is the professional package home loan.

What are professional package home loans?

Professional package home loans were originally introduced to reward low-risk borrowers, such as doctors, lawyers, and accountants, by bundling banking products together with their home loans and offering discounts and perks. However, today, many lenders allow anyone borrowing over $250,000 to apply for a professional package home loan and access the benefits of bundling banking products.

Professional packages are not exactly loan types, rather they are an overarching promotional product that allows borrowers to enjoy a number of perks.

Professional packages started becoming an official bank product when the deregulation of the banking sector took effect in the 1980s. Competition became tight for banks. And as a move to maintain competitive edge, banks started offering bundled banking products to select customers. They only offered these packages to clients who are low-risk and high-debt customers. The clients that fit the bill were mostly doctors, accountants, teacher, and more.

However, as the competition continued to tighten, banks started offering bundled products to people outside of the mentioned professions.

What are included in professional packages?

These packages differ per bank, but the following are some of the most common inclusions:

  • interest rate discounts
  • credit cards with waived annual fees
  • free offset and savings accounts
  • income protection insurance
  • car insurance discounts

Clients with low LVR (loan-to-value ratio) can get more perks from these professional bundles, however, even high LVR loans or those with only 5% deposit can get better deals from professional packages than from standard loan products.

What are the benefits of professional packages?

One of the biggest benefits of professional home loan packages is the convenience of having multiple financial products at once. It would be easier to manage your finances when they are under one bank or lender. On top of this, if you know how to make these additional financial products to you advantage, it can lead to significant savings. You can also negotiate for better terms or deals for the additional products that the bank offers to you.

Sounds great, right? But… 

What are the downsides of professional packages?

Any financial product is a commitment. The additional credit cards and other offers may be too overwhelming for you, especially if you don’t need them in the first place. You may end up feeling compelled to use them since you already have them anyway. This could be a disaster fi you’re trying to stick to a no-frills financial life.

Professional packages also have an annual fee. They cost anywhere from $300 to $700.

Is a professional package home loan always the best choice?

The answer will depend on a few factors. While professional package home loans can offer significant savings, they may not be the best option for everyone. It’s important to consider your personal circumstances and financial goals to determine if a professional package home loan is right for you.

For example, if you are a borrower who doesn’t require additional banking products or features, you may find that a standalone home loan is the most cost-effective option. In this case, bundling additional products in a professional package home loan may not provide you with any additional value.

However, if you’re a borrower who has multiple products from various institutions, bundling them together in a professional package home loan can provide you with convenience and cost savings. Additionally, if you’re a borrower who has existing debts, a professional package home loan may turn out to be cheaper than paying individually for each financial service you use.

How to determine if a professional package is right for you?

To determine whether a professional package home loan is right for you, it’s important to compare different home loan options from various lenders. You can start by comparing home loans, or better yet, contact us and we will do this work for you. As a mortgage broker, we have access to a wide range of loan products and we have extensive experience in matching clients with the right loan product for their needs. We are always ready to help you settle with only the best option.