Professional Packages
Professional Packages are generally offered to
people who are lending larger amounts of money (higher-value clients)
by offering them various interest rate discounts in exchange for
an annual fee.
Typical Packages
Under Professional Packages, different lenders
offer different features and rates, generally according to the amount
you are borrowing and the loan structure. The range of offers is
as broad as the number of lenders offering professional packages,
but essentially they fall into the following categories:
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For variable rate home loans, discounts off standard variable
rate home loans are available for larger loan amounts. This
discount starts at around $150,000 dependent upon the lender
and can range anywhere from 0.50% - 0.70% or even higher
(usually for amounts greater than one million).
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For fixed rate home loans, some lenders will offer discounts
of around 0.15%. off their standard home loan rates.
-
For Line of Credit facilities, discounts of up to 0.60%
are available off the standard Line of Credit rates.
Annual Fees
Annual fees typically range from $350 pa for
a basic package to $750 pa for a 'private banking' type client package.
The discounts cover lending as well as a whole myriad of other services
that you may or may not need. The annual fee usually encompasses
the following:
-
All application fees. Regardless of how many different loans
you have, you still only pay the one annual fee.
-
No ongoing fees on any of your loans.
-
Waiver of most of the account keeping type fees on your
transactional accounts.
-
Waiver of the annual fee on your credit card.
-
Discounts on other products such as margin loans, home insurance,
personal insurance, financial planning etc.
Weigh up the benefits - fees versus rate discounts
It is important to weigh up the benefit of the
annual fee versus the discounts offered. If you have a larger number
of loans and will utilise the other services offered under the package,
it may well be worth your while. On the other hand, if you only
have a few loans or lower loan amounts and won't be utilising the
other services, the interest rate savings might be eroded by the
annual fee, given that other discounted products are usually available
on a stand alone basis. The best option is to
get an experienced mortgage
broker to assess your personal situation to help you decide
whether a professional package is the right option for your situation.
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I just returned from an overseas posting and needed
to find a new home and sort out my finances quickly.
Phil Page and X Inc
took the time to understand my situation, gave me the
right advice, and organized my finances in record time."
Timothy Prescott, Paddington, NSW
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Portfolio Loans
Portfolio loans are relatively new and are generally
suited to people who have a number of different loans relating to
different investments and for whom changes in the both the investments
and loan amounts are a common occurrence.
The basic principal is that you have one 'limit'
and then it is up to you to decide how many 'sub-accounts' you have.
The number of 'sub-accounts' or loans you can have ranges from 12
up to 18. Instead of having one loan contract for every facility
you have, you have only one loan contract, allowing you to divide
it up as you see fit.
Portfolio loans are internet managed and pricing
is somewhat higher than that offered under Professional Packages,
reflecting the greater degree of flexibility available. The terms
and conditions of these products vary significantly from lender
to lender, talk to a local
mortgage broker to help you decide whether this type of product
is valuable in your situation.
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