Learn more about bundled home loans
Want a home loan package deal, combining a mortgage with a bank account, credit card, and more? Learn more about how bundled home loans work, as well as their risks and rewards, before comparing interest rates on the Australian mortgage market.
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Fixed - 2 years
Borrow up to 90%
Bundle your mortgage, transaction account and other Suncorp products. If you're refinancing, you can even get cash back.
Borrow up to 80%
An owner occupier home loan with a competitive variable interest rate, unlimited extra repayments and a free redraw facility.
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Fixed - 2 years
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What is a bundled home loan?
Bundled home loans, also known as packaged loans, allow you to combine several different financial products from the same supplier.
Generally, a bundled mortgage will let you add one or more of the following to your standard variable home loan:
- Credit cards
- Financial planning
- Insurance products (building and contents, car, income protection, life, total and permanent disability)
- Mortgage offset account
- Savings accounts
- Share trading
Why choose bundled home loans?
Bundled home loans can provide a range of financial products in a single offer, which you can tailor to suit your circumstances.
This is similar to the bundle deals offered by utilities companies that let you combine your gas and electricity in to one account, or the phone, internet and entertainment packages offered by telecommunications companies.
A packaged home loan generally offers you the convenience of having one supplier of your financial services. Plus, you may pay one fee, and enjoy advantageous discounted rates.
What are the main choices for bundled home loans?
Not all bundled home loans are the same, so you should consider your options before choosing one.
For instance, if you’re buying a home to live in, then as an owner-occupier you may want a package that includes an affordable variable rate loan, a credit card and possibly a savings account.
If you are self-employed, you might want a credit card and a transaction account, plus a flexible low-doc home loan with an interest-only option. This can be helpful if your business income fluctuates from time to time.
If your plan is to borrow to invest in one or more properties, then you may be interested in a flexible home loan with a discounted fixed rate, plus a credit card.
What are the rewards and risks?
In the right circumstances, bundled home loans can be very convenient, and offer lower interest rates. Also, packaged home loans that offer flexible features can become very useful if your circumstances change.
However, if you know that you won’t use all the features in a bundled home loan package, it may not be right for you. For example, if you already have a good deal on a credit card, you don’t need another transaction account, or discounted insurance products won’t suit you, then you may want to re-think whether a package home loan will be worth your time and money.
It’s also important to compare the cost of any fees and charges on a home loan bundle to the value of its features and benefits, so you can be confident the bundle will be worth it for you. For example, if you wanted to borrow a relatively small sum, say $100,000, the fee for the bundle might be higher than the value of the discounts on the bundle’s features – you may want to check if a stand-alone home loan may suit you better.
The following mortgage offers are not specifically bundled home loans. We’ve shown you these home loans to help you compare what’s available in the Australian mortgage market, and make a more informed financial decision.
To get a bundled home loan offer, contact a bank or mortgage lender and ask which of their other services can be packaged with their home loans, and what fees and charges may apply.
Property Personal Finance Writer
A property and personal finance writer, Nick Bendel covers property, loans, credit cards, superannuation, and other bank products. Nick has previously written for The Adviser, Mortgage Business, Lifehacker, Business Insider, Yahoo Finance, and InvestorDaily, and loves getting elbow-deep in the latest ABS, APRA and RBA data.
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Frequently asked questions
How can I get a home loan with bad credit?
If you want to get a home loan with bad credit, you need to convince a lender that your problems are behind you and that you will, indeed, be able to repay a mortgage.
One step you might want to take is to visit a mortgage broker who specialises in bad credit home loans (also known as ‘non-conforming home loans’ or ‘sub-prime home loans’). An experienced broker will know which lenders to approach, and how to plead your case with each of them.
Two points to bear in mind are:
- Many home loan lenders don’t provide bad credit mortgages
- Each lender has its own policies, and therefore favours different things
If you’d prefer to directly approach the lender yourself, you’re more likely to find success with smaller non-bank lenders that specialise in bad credit home loans (as opposed to bigger banks that prefer ‘vanilla’ mortgages). That’s because these smaller lenders are more likely to treat you as a unique individual rather than judge you according to a one-size-fits-all policy.
Lenders try to minimise their risk, so if you want to get a home loan with bad credit, you need to do everything you can to convince lenders that you’re safer than your credit history might suggest. If possible, provide paperwork that shows:
- You have a secure job
- You have a steady income
- You’ve been reducing your debts
- You’ve been increasing your savings
Are bad credit home loans dangerous?
Bad credit home loans can be dangerous if the borrower signs up for a loan they’ll struggle to repay. This might occur if the borrower takes out a mortgage at the limit of their financial capacity, especially if they have some combination of a low income, an insecure job and poor savings habits.
Bad credit home loans can also be dangerous if the borrower buys a home in a stagnant or falling market – because if the home has to be sold, they might be left with ‘negative equity’ (where the home is worth less than the mortgage).
That said, bad credit home loans can work out well if the borrower is able to repay the mortgage – for example, if they borrow conservatively, have a decent income, a secure job and good savings habits. Another good sign is if the borrower buys a property in a market that is likely to rise over the long term.
Who has the best home loan?
Determining who has the ‘best’ home loan really does depend on your own personal circumstances and requirements. It may be tempting to judge a loan merely on the interest rate but there can be added value in the extras on offer, such as offset and redraw facilities, that aren’t available with all low rate loans.
To determine which loan is the best for you, think about whether you would prefer the consistency of a fixed loan or the flexibility and potential benefits of a variable loan. Then determine which features will be necessary throughout the life of your loan. Thirdly, consider how much you are willing to pay in fees for the loan you want. Once you find the perfect combination of these three elements you are on your way to determining the best loan for you.
What is a variable home loan?
A variable rate home loan is one where the interest rate can and will change over the course of your loan. The rate is determined by your lender, not the Reserve Bank of Australia, so while the cash rate might go down, your bank may decide not to follow suit, although they do broadly follow market conditions. One of the upsides of variable rates is that they are typically more flexible than their fixed rate counterparts which means that a lot of these products will let you make extra repayments and offer features such as offset accounts.
How do I refinance my home loan?
Refinancing your home loan can involve a bit of paperwork but if you are moving on to a lower rate, it can save you thousands of dollars in the long-run. The first step is finding another loan on the market that you think will save you money over time or offer features that your current loan does not have. Once you have selected a couple of loans you are interested in, compare them with your current loan to see if you will save money in the long term on interest rates and fees. Remember to factor in any break fees and set up fees when assessing the cost of switching.
Once you have decided on a new loan it is simply a matter of contacting your existing and future lender to get the new loan set up. Beware that some lenders will revert your loan back to a 25 or 30 year term when you refinance which may mean initial lower repayments but may cost you more in the long run.
What is a bad credit home loan?
A bad credit home loan is a mortgage for people with a low credit score. Lenders regard bad credit borrowers as riskier than ‘vanilla’ borrowers, so they tend to charge higher interest rates for bad credit home loans.
If you want a bad credit home loan, you’re more likely to get approved by a small non-bank lender than by a big four bank or another mainstream lender.
What are the pros and cons of no-deposit home loans?
It’s no longer possible to get a no-deposit home loan in Australia. In some circumstances, you might be able to take out a mortgage with a 5 per cent deposit – but before you do so, it’s important to weigh up the pros and cons.
The big advantage of borrowing 95 per cent (also known as a 95 per cent home loan) is that you get to buy your property sooner. That may be particularly important if you plan to purchase in a rising market, where prices are increasing faster than you can accumulate savings.
But 95 per cent home loans also have disadvantages. First, the 95 per cent home loan market is relatively small, so you’ll have fewer options to choose from. Second, you’ll probably have to pay LMI (lender’s mortgage insurance). Third, you’ll probably be charged a higher interest rate. Fourth, the more you borrow, the more you’ll ultimately have to pay in interest. Fifth, if your property declines in value, your mortgage might end up being worth more than your home.
What is a fixed home loan?
A fixed rate home loan is a loan where the interest rate is set for a certain amount of time, usually between one and 15 years. The advantage of a fixed rate is that you know exactly how much your repayments will be for the duration of the fixed term. There are some disadvantages to fixing that you need to be aware of. Some products won’t let you make extra repayments, or offer tools such as an offset account to help you reduce your interest, while others will charge a significant break fee if you decide to terminate the loan before the fixed period finishes.
Can I change jobs while I am applying for a home loan?
Whether you’re a new borrower or you’re refinancing your home loan, many lenders require you to be in a permanent job with the same employer for at least 6 months before applying for a home loan. Different lenders have different requirements.
If your work situation changes for any reason while you’re applying for a mortgage, this could reduce your chances of successfully completing the process. Contacting the lender as soon as you know your employment situation is changing may allow you to work something out.
Does Australia have no cost refinancing?
No Cost Refinancing is an option available in the US where the lender or broker covers your switching costs, such as appraisal fees and settlement costs. Unfortunately, no cost refinancing isn’t available in Australia.
Can I get a home loan if I am on an employment contract?
Some lenders will allow you to apply for a mortgage if you are a contractor or freelancer. However, many lenders prefer you to be in a permanent, ongoing role, because a more stable income means you’re more likely to keep up with your repayments.
If you’re a contractor, freelancer, or are otherwise self-employed, it may still be possible to apply for a low-doc home loan, as these mortgages require less specific proof of income.
Will I have to pay lenders' mortgage insurance twice if I refinance?
If your deposit was less than 20 per cent of your property’s value when you took out your original loan, you may have paid lenders’ mortgage insurance (LMI) to cover the lender against the risk that you may default on your repayments.
If you refinance to a new home loan, but still don’t have enough deposit and/or equity to provide 20 per cent security, you’ll need to pay for the lender’s LMI a second time. This could potentially add thousands or tens of thousands of dollars in upfront costs to your mortgage, so it’s important to consider whether the financial benefits of refinancing may be worth these costs.
Is there a limit to how many times I can refinance?
There is no set limit to how many times you are allowed to refinance. Some surveyed RateCity users have refinanced up to three times.
However, if you refinance several times in short succession, it could affect your credit score. Lenders assess your credit score when you apply for new loans, so if you end up with bad credit, you may not be able to refinance if and when you really need to.
Before refinancing multiple times, consider getting a copy of your credit report and ensure your credit history is in good shape for future refinances.
I have a poor credit rating. Am I still able to get a mortgage?
Some lenders still allow you to apply for a home loan if you have impaired credit. However, you may pay a slightly higher interest rate and/or higher fees. This is to help offset the higher risk that you may default on your repayments.
I can't pick a loan. Should I apply to multiple lenders?
Applying for home loans with multiple lenders at once can affect your credit history, as multiple loan applications in short succession can make you look like a risky borrower. Comparing home loans from different lenders, assessing their features and benefits, and making one application to a preferred lender may help to improve your chances of success
Will I be paying two mortgages at once when I refinance?
No, given the way the loan and title transfer works, you will not have to pay two mortgages at the one time. You will make your last monthly repayment on loan number one and then the following month you will start paying off loan number two.
If I don't like my new lender after I refinance, can I go back to my previous lender?
If you wish to return to your previous lender after refinancing, you will have to go through the refinancing process again and pay a second set of discharge and upfront fees.
Therefore, before you refinance, it’s important to weigh up the new prospective lender against your current lender in a number of areas, including fees, flexibility, customer service and interest rate.
Can I refinance if I have other products bundled with my home loan?
If your home loan was part of a package deal that included access to credit cards, transaction accounts or term deposits from the same lender, switching all of these over to a new lender can seem daunting. However, some lenders offer to manage part of this process for you as an incentive to refinance with them – contact your lender to learn more about what they offer.
How do I know if I have to pay LMI?
Each lender has its own policies, but as a general rule you will have to pay lender’s mortgage insurance (LMI) if your loan-to-value ratio (LVR) exceeds 80 per cent. This applies whether you’re taking out a new home loan or you’re refinancing.
If you’re looking to buy a property, you can use this LMI calculator to work out how much you’re likely to be charged in LMI.
How common are low-deposit home loans?
Low-deposit home loans aren’t as common as they once were, because they’re regarded as relatively risky and the banking regulator (APRA) is trying to reduce risk from the mortgage market.
However, if you do your research, you’ll find there is still a fairly wide selection of banks, credit unions and non-bank lenders that offers low-deposit home loans.