Welcome to our professional package Home Loans information page: This page is designed to assist you in understanding the basics of this type of loan, and to give you an understanding of some of the features and downsides.
About Our services:
- Our brokers are experts in obtaining home loan approvals and specifically trained in loan structuring and credit policy, ensuring the best possible outcome for your needs.
- We provide an Australia wide service, at no cost to you.The lenders pay us a commission for the introduction of your business.
- Our website is designed to help borrowers understand the differences between loan types and the importance of having a mortgage broker to assist you in finding the right lender.
About Professional Package Home Loans
What is a Professional Package Home Loan?
Also known as a pro pack loan, these loans are available from most lenders. They are discounted loans, usually for loan amounts over $250,000, and the more you borrow, the bigger the discount that you could receive.
A bit of history: Between 1983 and 1985, Australia’s banking system was deregulated. Prior to this time the big four banks (CBA, NAB, ANZ and Westpac) were the main home loan lenders in Australia. They created a product that was only available to “professionals”. Occupations such as doctors, lawyers and teachers etc, Because they were in a “profession” that was deemed to be “suitable” regarding income amounts and job stability, the banks offered them these packages. They were not available to the general working occupations or blue-collar workers.
After the banking system was deregulated and more competition appeared on the horizon, other lenders started offering packages to their clients. In order to remain competitive, the big four lenders were then obligated to open up this type of loan to other employment types.
Most lenders and banks now have this type of facility, they call them by different names but they are essentially the same deal.
Amazing what a little competition in the market will do.
The basics of a professional package home loan are as follows:
- You will receive a discount based on two criteria: The loan amount and the LVR (LVR is the amount of loan vs the property value. Example: House valued at $500,000 with a loan of $400,000 is an 80% LVR) Loans more than 80% LVR usually receive lower discounts. A few lenders do not use LVR pricing and their full discounts will still apply.
- You need to be aware that these loans may have similar structures, yet the interest rates can be worlds apart.
- The bank or lender will usually charge an annual package fee that can range from $220-$395 per year. This fee entitles the borrower to receive the discounts on their interest rate.
- Borrowers are generally also entitled to other benefits and options as part of the package deal which will be explained below.
- Applicants with borrowings over $250,000 will be offered a discount off the lenders standard variable-rate. These discounts usually start at 0.5% with most lenders. The more you are lending, the bigger the discount.
- There are some lenders who will still apply a discount on borrowings lower than $250,000.
Should You Choose a Professional Package Home Loan?
As with most of the loans that we look at, it will depend entirely on your circumstances as to whether a pro pack home loan is going to be suitable for you. There are a few points to consider before locking into one of these loans and being stuck with the annual fee and the conditions in the contract.
Things to consider:
- Depending on how much you will borrow, there may be other options out there that are going to be more suitable for you. We need to examine the savings between a pro pack loan and other loan options that we have to make sure that the fees charged are justified.
- If you are only borrowing small amounts of money, then we will generally have different loans available, without any fees, and they are still at very competitive interest rates, which will generally be more suitable for you.
- If you are thinking of utilising a Fixed Rate Home Loan, then there is a good chance that you would not obtain a discount in any case, therefore eliminating any benefits of a Professional Package Home Loan. In this situation it would be detrimental to you as you are now paying the annual package fee each year for absolutely no reason. A select few lenders will still offer a discount on fixed-rate loans under a package structure, but you will find that the discount is very minimal and must be compared to other options.
- As you can see, there is a lot to consider when looking at a Professional Package Home Loan and it is not all covered here. Your mortgage broker will be able to discuss your individual circumstances with you in order to provide a needs analysis. This way your broker can guide you as to whether this type of loan is going to be the best option for you.
What benefits are there for you in a Professional Package Home Loan?
There are many benefits in a professional package home loan provided that your needs analysis suggests that this loan is the best for you.
There are many options available from the different lenders that we deal with, and all of the package loans that they offer, are different. Let’s take a look at the main benefits.
Benefits of a pro pack home loan:
- Any discount is a good discount. The more you borrow with this type of loan, the bigger the discount that will be offered. Discounts will range across all loan types from 0.25% up to well over 1%. There are serious savings to be made when your loan is set up with the correct facility.
- A pro pack is available for most loan types such as variable rate loans, line of credit loans, interest only loans and also split loans. A pro Pack Loan is also available with Fixed Rate loans, but beware, it may NOT be worth your while to combine the two. There is a lot of errors made by the average person when doing this. It is buyer beware at its extreme.
- Note: As mentioned before, the fixed-rate loans will suffer under these packages as you would not generally be offered a discount at all on your fixed loan. If you are offered a discount, it will be very minimal in most cases.
- Professional package home loans are also available for many different loan purposes. They can be used for owner occupied loans, investment property loans, refinance loans, debt consolidation loans, renovation loans and some construction loans
- Pro packs are normally offered with a suite of products. These products can range from discounts on credit card fees right through to no fees on savings accounts and even discounts on insurance products that the lender sells, amongst other benefits.
Note: We do not normally recommend or cross sell the banks other products such as credit cards or insurance products. However, you can still compare any offer from the incoming lender, to whom you use currently. If it is cheaper, great – and if not, great. As long as you don’t lose anything, it’s all great.
- Most pro packs will allow you to make small changes to your loan without incurring any fees. You should be able to transfer, deposit, redraw available funds and even apply for increases and not pay any further fees with most of these types of loans.
- When you pay a fee for a pro pack, you generally will not need to pay any application fee at all. In most cases the valuation fee will also be waived.
What do you need to be careful of in a Professional Package Home Loan?
These loans in general are very good but they are certainly not for everybody. Your mortgage consultant has an obligation to understand your needs and objectives before making any recommendation regarding a professional package home loan. Once we know your exact situation, we will be able to advise if this is the right loan for you or if there is a different option available that could be more beneficial for you.
What you need to be careful of:
- You need to be careful that the type of loan that you need is going to be of benefit to you, by being packaged, and that you would not be paying an annual fee unnecessarily.
- If you do not need a whole suite of bank products, then this loan may not be suitable for your needs. Your broker will discuss each lenders facility with you, and point out the differences between the loans on offer, from several lenders, with this type of loan. This will guide you as to whether a pro pack loan will be suitable for you.
- If you are not borrowing sufficient amounts to ensure that appropriate discounts apply, then this package deal may not benefit you. Your broker will also be able to assist you in determining if the savings that you would make in a package loan are outweighed by the cost of the annual fee.
- Depending on which lender you are with, and which loan you are in, you may not be allowed to switch into a pro pack loan. This is quite common in honeymoon rate loans and basic discount variable-rate loans and in particular fixed-rate loans. This means that you may be forced to refinance to a different lender. This is not necessarily a bad thing, just keeping in mind that there are literally hundreds of loans on the market and it is important to know which lender and which loan are going to benefit you the most.
How can I apply?
These are your simple steps to apply for a loan.
- Contact us on the numbers above to speak to a mortgage broker, or complete our online enquiry form.
- You will speak with a broker who will take into account your needs by discussing not only your requirements, but also any concerns you have, and offer you some possible strategies and ideas that you may not have thought about.
- Once we know what you require, we will draft and email you a proposal– this will usually consist of a few options that are easy to understand.
- Once you have had a chance to look at what options are available, you can contact your broker or the broker will call you, to discuss the proposal.
- You can then decide if you wish to proceed or you may just want to discuss more options.
What are my other options?
There are many options available:
- Whether you are after a variable interest rate, a fixed interest rate, interest only loan, equity loan or any of the other loans available, it is important that you find out what is available to you before applying for a loan.
- The loans listed below are available for most lending purposes. Whether you are refinancing your home loan to a lower rate, or a property investor looking to buy that second or third property, we will have some ideas for you to consider.
- Even if you are a first home buyer purchasing a new home or renovating your existing home, there are some great deals available from the banks and lenders that we are accredited with.
- Please click on a link below to learn more about other loans that are available to you.