Prof. package. Do I have a good deal?

Hi,

Can anyone assess if what I've got is a good deal. It will be great if anyone can offer something better...
My situation:
*Selling my current home, this should bring me about 200K.
*Salary: about 100K, full time permanent employee with 4 years in current job.
*Apart from current mortgage, no loans or debts.

Loan I need:
* Offset account, interest only (this is essential, I may want to rent out the house in couple of years and want to negative gear the interest)
* Variable rate
* 80% LVR of the 412K property I'm buying
* Professional package welcome

Current best offer:
* CBA prof. package with full offset and gold CCard
* No ongoing or transactional fees
* 0.8 discount off the current rate = currently, 7.52%
* No establishment fees
* $300 yearly fee waived for the first year (this was hard!)

===========
Other alternatives (not as good)
===========

Westpak prof package
* 7.52%
* No establishment fees, ongoing or transactional fees
* $395 yearly fee

=============
NAB prof package
* 7.62% (trying to negotiate anything better but it's hard!)
* No establishment fees, ongoing or transactional fees
* $120 yearly fee
 
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Hiya

One small (maybe BIG) point here is that u are comoaring these things as if they were 3 fridges :), for many mum and dad PPOR buyers, a mortgage secured loan can often be considered as a "consumber durable"................


I would like to say that comparing these 3 products directly, without knowing what your longer term goals are is not valid since they are actually quite different beasts.

Its similar to comparing a Huyindai Excel, a Corolla, and Pryus.

Wesuck has the best servicing model and the least difficult paperwork. Probably marginally more exxy than CBA but often cheaper than NAB

CBA is probably financially the cheapest BUT the hardest to work with in terms of docs and in branch service, forced credit card can be a problem for lower income earners

NAB not a bad product BUT very conservative till they get to know you, expensive LOC and a common insistence on cross collateral. Not bad

ANZ also fits into that sphere with Breakfree as do probably 2 or 3 regional and 2nd tier banks

ta
rolf
 
You may be able to get more than 0.7% of your variable rate if you ask.

Why don't you play CBA and Westpac against each another ?

Credit cards are usually free & mandatory with the proff packages.

Remember that you have all the control when you are applying for the loan. You will have less control when you already have it.

You should look at break/refinance costs as well.

Cheers
 
I would like to say that comparing these 3 products directly, without knowing what your longer term goals are is not valid since they are actually quite different beasts.

Its similar to comparing a Huyindai Excel, a Corolla, and Pryus.

Hi Rolf,

Thanks for your reply, I will certainly look at the exit fees. Usually they're OK if stay 4 years or more.

I'm not an investor and just want a good deal on PPOR home loan.
Currently I'm with Homepath and I can stand them: once loan is established they're OK for me.

The only reason for leaving Homepath is to have an offset account so I can rent out my home in couple of years and have tax deduction on interest.

I may consider buying IP in some time, but not sure about it yet.
 
Hiya Azza

on the basis any of those packs will work, but stay away from STG and Heritage whose Offset is interest based and not a true 100 % offset on PPOR based loans.

Have a look at the ANZ professional package ( not the breakfree) , structured right this can be cheapish and still provide what you need

ta
rolf
 
Loan I need:
* Offset account, interest only (this is essential, I may want to rent out the house in couple of years and want to negative gear the interest)
* Variable rate
* 80% LVR of the 412K property I'm buying
* Professional package welcome

Current best offer:
* CBA prof. package with full offset and gold CCard
* No ongoing or transactional fees
* 0.7 discount off the current rate = currently, 7.52%
* No establishment fees
* $300 yearly fee waived for the first year (this was hard!)

I negotiated the following with CBA
- 288K lend, 80% LVR
- MISA offset account, interest only loan
- $100 settlement fee, nil establishment fee, nil ongoing fees
- No prof package (I dont therefore have the benefits, or pay the package fee)
- 0.85% discount off SVR (I have no other business with the bank)

Some points to consider.
1) There are some lending institutions who offer my profession good deals (better than the usual 0.7% off). I was able to use these deals to apply leverage to the CBA. They are much more willing to negotiate if they have a target to beat. I had to provide evidence of the other offers I had. The various loan products were apples and oranges (not quite alike) but CBA was the best combination.

2) I have heard the CBA customer service is so-so. A few times when I've been to branches, the lack of knowledge was not impressive. That said, the specific lending manager I dealt with was fantastic. Knew his game and gave great customer service (short settlement period, prompt responses, everything done by phone/email/fax). I never stepped into a branch. PM me if you want his details.

3) The MISA is a pain in the @$$ to work with. Its not a fully functional offset account. You cant do automatic debits to third partys (eg credit cards) and the interest payments wont come out of it. You therefore need to actively move money arround to get the best out of it (or leave a few $k sitting in a streamline account if you are lazy).

Hope that helps,

Dis
 
I negotiated the following with CBA
- 288K lend, 80% LVR
- MISA offset account, interest only loan
- $100 settlement fee, nil establishment fee, nil ongoing fees
- No prof package (I dont therefore have the benefits, or pay the package fee)
- 0.85% discount off SVR (I have no other business with the bank)

Wow, that's a really good deal!!!
You've nearly got Homepath rate on this loan.... they are currently 7.46% and yours must be 7.47% with only $100 setup fee!

I've got 0.8% and not 0.7% discount as I mentioned previously... but 0.85% is even better, will think about it.

BTW you must be eligible for a free transaction account anyway, without the package.... can't wait to get your manager details.
 
The CBA MISA account is not a transactional offset account - it's not something you can live out of like a savings account. The Westpac offset account is a true offset account.

I have loans with both Westpac and CBA. I'll take Westpac any day of the week, based on service and product features, which do translate to $$$ savings.
 
Hi,
* CBA prof. package with full offset and gold CCard
* Westpak prof package
* NAB prof package

Hello everyone,

I was trying to ask earlier but got no responses ...

What are the benefits to have mortgage with there banks rather than with these guys for example ?

7.15% looks very attractive even if paying high application fee ?

Any catches there ?

We are with Challenger/Interstar at the moment and they increases interest rate to 8.34% recently - that's why we are going to refinance soon and will be looking to buy IP in the nearest future.

Do you think Ratebusters is a good choice for us ?

Or should we stick with banks ?
 
Hiya Sidor

If you take a fixed rate there is probably a little less exposure to world credit markets than a variable rate in that style of lender.

Pro packs are well suited to "risk averse" borrowers that want more surety that their rates arent going to unilaterally raise their variable rates.

BUT, there is no guarantee, just some common sense that a lender with other income streams is likely to have less expsure to "lender risk".

A lot of my clients that want a BASIC home loan are going for the Heritage Product at 7.45, its cheap, its basic, but once people realise it noe comes from Australias largest building society, they get the BIG bank thing out of the way...............dunno bout the lender risk though.

ta
rolf
 
Hiya Azza
Have a look at the ANZ professional package ( not the breakfree) , structured right this can be cheapish and still provide what you need

ta
rolf

Off topic, and I apologise for that.

Can someone explain the difference between the Prof package and the breakfree? I thought that they were the same:confused:
 
Hiya Mel

nah

Breakfree is the deal where u pay no app or monthly fees, but you get a good discount on variable, you get a free ( though force fed) credit card and a fee free offset acct

Pro Pack is simply the discounted variable........still pay an app fee and a monthly if it applies. Pro pack is more suitable where the forced credit on break free pushes you over the service line, OR where the loan is between 150 and 250 k

ta
rolf
 
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