“Why should I go with a Professional Mortgage Package?” 

There is some confusion in the Mortgage market about Professional Packages offered by some Lenders.  For example some Mortgage holders maybe concerned as to why they are paying a higher interest rate for a basic home loan, compared to say someone else who is provided a discount rate on a professional package, is there really a saving?

What is a Professional Package?

Many lenders will have different fancy titles for these packages but generally they are all very similar.  The professional package generally works on the theory that the more products a client has  with a lender the harder it is for them to leave, and they are thus more likely to stay for the longer term and spend more money with the lender.  The object of the lender offering these packages is to encourage the client to use more of their products and services, most commonly insurances and credit cards.  They encourage the client to sign up for a package by offering incentives such as discounted interest rates on their home loan, fee free credit cards and savings on their insurance products.

Do I have to be a Professional to receive the Professional Package?

Different Lenders have different policies, but in general no. so long as it meets the Lenders Minimum loan size, typically $250,000.

Sounds pretty good, but what’s the catch?

In general a professional package can be very good for a client, but it is not always the most cost effective for everyone.  Most lenders will have an annual fee for their professional package around $350 to $400.  So it is not cheap for everyone, and not everyone will benefit in savings from the professional package to the tune of the Annual Fee every year.  For example whilst a lender may offer you a discount on insurance products, it still may not be cheaper than what you have already.

So how do I know which is best for me?

Our advice would be to sit down with your Mortgage broker and complete a comparison between a Lender’s standard product and professional package.  With this comparison you will be able to weigh up the cost and benefits of packaging your loan or not.  We’ve prepared a brief Pro and Cons summary table below for you to illustrate.

	Standard Home Loan	Professional Package
Pros	Basic Home Loan with no frills Can be perceived as easier to switch lenders if required No Annual Fees	Discount on Interest Rates and other products and services such as credit cards and insurance Some clients prefer having all their financial products with the one institution
Cons	Basic Home Loan still offers an interest rate discount, but not as generous. No discount on or products and services	Annual fees Discounts on other service and products may not be most cost effective in market, or offset the annual fee

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