Many Loan Options
When you are buying a home loan there are so many options out there in the market that it can get rather confusing. One particular options is a mortgage Package. It’s usually a bank that offers these kinds of packages and it offers ways to utilise a few of the bank’s services at a discounted rate. The particular bank provides is a mortgage and they add a few financial products. Perhaps credit cards and/or a transaction account without fees.
These packages are quite appealing to buyers. Banks ensure the popularity of their packages by offering at least three products, usually the minimum needed to be eligible, to boost the home loan.
Sweeteners
It’s a competitive market, particularly for banks considering they dominate the home loan market, to enable them to dangle the proverbial carrot on that home loan interest rate discount.
The level of discount that will be offered varies between finance institutions, so it is essential to understand the pros and cons and weigh this against your position.
PROS
All in One Place
If you have had a few different accounts and cards with numerous institutions you will find it a lot more convenient and manageable to own all of your banking with the main one lender. Given the lending company has probably offered you savings on accounts, cards and your mortgage, it wouldn’t make much sense to own accounts and cards at an increased rate or transactional costs with other institutions.
More Discounted Products
As mentioned, the four major banks own a huge chunk of the prevailing market in mortgages which gives them the ability to offer these package deals against which smaller lenders have difficulty competing. If you are looking to take out a home loan with a building society or a credit union, they often offer products through which they specialise.
High Income
For high income earners, package deals will help build equity much faster in an offset account. The savings on interest can be worked by way of a combination of experiencing the salary reduce the interest charge and living off the credit card. Remember to the card each month!
