Loans with linked Frquent Flyer schemes

[Peter Noake]

For all you QANTAS Frequent Flyer members out there, there are a few mortgages available from ANZ, Macquarie and Citibank that earn you QANTAS FF points based on your borrowings. The details are on the QANTAS website

http://www.qantas.com.au/fflyer/dyn/partners/financialServices/mortgages

I have no idea whether the products would be suitable for anyone's particular circumstances, but they might be worth looking into.

 

[Sim]

Have a very careful look at the interest rates and expenses on these loans and compare them to the regular loans offered by the banks - these frequent flyer points DO cost the bank (they have a dollar value which the bank pays to Qantas) so they need to get their money back from somewhere.

 

[Rolf Latham]

Awwwwww Sim

You are such a realist, guess what - you are right. You cant mix ff loans with professional packages etc

ta

Rolf

 

[Peter Noake]

Hey, like I said - they may not suit everyone, but I still think they are worth considering.

Certainly you need to look at fee structures, but to compare some rates for a moment, the Macquarie FF LOC rate is currently better than what I am currently getting with my NAB Professionals Choice package, and the 1-5yr fixed rates pretty close - some over the NAB package rates, some below.

As well, given that you get the majority of points in the first year, it may still be worth taking out a FF loan for a shorter period - even if the fee structure is slightly higher than opther packages. Maybe a year or so and then switch back.

Pierre

 

[Rolf Latham]

Hi Pierre

Times have changed perhaps, the rate is higher today AND always its some things will suit some and not others.

I must put my hand up here because the Points cost a LOT more than most believe.

The current offer from Maq is a rate of 6.40 %.

Based on a 250 000 k loan you can get 260 000 pts over three years.

Give me the money please :O)

Westpac will do a similar LOC at 5.97, so the pure $ difference over the 3 years is $ 3225.

Yes that will not buy me 2 rtn tickets to Europe BUT the real cost of those points on a full term mortgage is not $ 3225.

Assume for a sec you take a 30 year mortgage and it takes that long to pay off ( as if but lets play) the Maq FF loan costs $ 1564 a month.

The same payment into a non FF Product at 5.97 results in a loan that is repaid 3.4 years sooner = $ 63 800. At best over the term of the FF mortgage you will receive 12 rtn tickets for that 63 800.

As you say Pierre, the value is in the first couple of years.


Ta

Rolf

 

[Peter Noake]

Fair enough. One of the main reasons I wanted to raise this topic is to draw out exactly that kind of detail so that people can understand the advantages and more importantly the disadvantages of those kinds of schemes.

Thanks for the input Rolf.