Compare bundled home loans

Find home loans from a wide range of Australian lenders that best suit your needs, whether you're investing, refinancing or looking to buy your first home. Compare interest rates, mortgage repayments, fees and more. - Data last updated on 26 Apr 2019

Compare bundled home loans

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Bundled home loans

Bundled home loans, also known as packaged loans, allow you to combine a number of different financial products from the same supplier. Generally you have the option of adding to your standard variable home loan one or more of the following:

  • 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 opt for bundled home loans? 

Telecommunications and utilities companies have found they can offer customers a better deal by supplying a variety of products together. For example Telstra currently offers bundles that include broadband, home entertainment as well as mobile and home telephone services. In a case the services usually will be available for one fixed fee instead of three or four separate ones. 

In the same way, bundled home loans can provide a range of financial products, as noted above, that you can tailor to suit your particular circumstances. This type of loan generally offers you the convenience of having one supplier and one fee as well as advantageous discounted rates.

What are the main choices for bundled home loans? 

Not all bundled home loans are the same and the bundle you choose should be based on your status and the reasons you want a home loan in the first place. For instance, if you are in the process of buying your home, then as an owner-occupier you will probably be best seeking a package that includes an affordable, strong 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 loan with an interest only option where minimal documentation is required. This is helpful if your business income fluctuates from time to time. If your plan is to borrow to invest in one or more properties then flexibility will also be key and a discounted loan at a fixed rate, plus a credit card will also be useful.

What are the rewards and risks?

 

There is no doubt that bundled home loans are convenient and the lower interest rates are attractive. If you have considerable assets you can benefit from extra interest on savings and foreign transactions, which may be useful. Also, bundled home loans often offer flexible loan facilities that can become very important if your circumstances change.

However, if you know that you won’t use the features in the package a bundled home loan may not be right for you. If you already have a good deal on a credit card, for instance, or you don’t need another transaction account and the discounted insurance products don’t suit you then a package is probably a waste of your time and money. It’s also the case that if you want to borrow a relatively small sum, say $100,000, the fee for the bundle might not be covered by the discounts on the features and a stand-alone home loan at lower cost may suit you better.

FAQs

They’re impersonal 

Most comparison sites give you information about rates, fees and features, but expect you’ll pay more with a low advertised rate and $400 ongoing fee or a slightly higher rate and no ongoing fee. The answer is different for each borrower and depends on a number of variables, in particular how big your loan is. Comparisons are either done based on just today or projected over a full 25 or 30 year loan. That’s not how people borrow these days. While you may take a 30 year loan, most borrowers will either upgrade their house or switch their home loan within the first five years. 

You’re also expected to know exactly which features you want. This is fine for the experienced borrower, but most people know some flexibility is a good thing, but don’t know exactly which features offer more flexibility than others. 

What is the flexibility score?

Today’s home loans often try to lure borrowers with a range of flexible features, including offset accounts, redraw facilities, repayment frequency options, repayment holidays, split loan options and portability. Real Time Ratings™ weights each of these features based on popularity and gives loans a ‘flexibility score’ based on how much they cater to borrowers’ needs over time. The aim is to give a higher score to loans which give borrowers more features and options.

They’re not always timely

In today’s competitive home loan market, lenders are releasing new offers almost daily. These offers are often some of the most attractive deals in the market, but won’t get rated by traditional ratings systems for up to a year. 

The assumptions are out of date 

The comparison rate is based on a loan size of $150,000 and a loan term of 25 years. However, the typical loan size is much higher than that. Million dollar loans are becoming increasingly common, especially if you live in metropolitan parts of Australia, like Sydney and Melbourne. It’s also uncommon for borrowers to hold a loan for 25 years. The typical shelf life for a home loan is a few years. 

The other problem is because it’s a percentage, the difference between 3.9 or 3.7 per cent on a $500,000 doesn’t sound like much, but equals around $683 a year. Real Time Ratings™ not only looks at the difference in the monthly repayments, but it will work out the actual cost difference once fees are taken into consideration. 

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^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

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