The Commonwealth Bank Wealth Package bundles your home loan with a CBA transaction account, CBA credit card and CommInsure Insurance to reduce your fees and receive discounted interest rates on your mortgage.
This package is available to most borrowers, whether you’re an owner-occupier looking for a variable rate, an investor looking to fix or a combination of the two. The discounts vary depending on how big your loan is, with the biggest savings going to those who borrow the most money.
Combined with a number of fee waivers, this can generate significant long term savings over the life of your home loan, especially if you’re shrewd enough to use those savings to make extra repayments and reduce your principal amount owed at a faster rate.
Additionally, the Commonwealth Bank Wealth Package offers a range of features, depending on the specific mortgage you have chosen, such as an offset account, redraw facility and the ability to make extra repayments. These features are great tools you can use to considerably reduce the amount of interest paid over the term of your loan.
The Commonwealth Wealth Package is only available in connection with a selection of CBA’s home loans.
More specific product information is available here.
Review of the highlights
If you are already a Commonwealth Bank customer and already have a couple of other financial products with the bank, such as a credit card and a transaction account, you could benefit from bundling a new home loan in with your existing products, as the fees attached to these other accounts are likely to be waived. If the mortgage you choose includes establishment and service fees, they’ll also be waived.
The CBA Wealth Package also includes discounts off home, car and loan protection insurance of up to 15 per cent provided you go through their insurance arm, CommInsure which is a handy savings for anyone who has already reviewed these insurance products and selected them on their merits.
However the biggest savings to be had are likely to be from the discount you receive off your mortgage interest rate. While these discounts won’t get your rates down to the lowest on the market they are a welcome perk that rewards customers for their loyalty to the bank. The size of the discount will depend on which loan you take out and how much you borrow, but it’s worth remembering that anyone looking to borrow over $250,000 could be eligible for further discounts so review the terms and conditions and be sure to negotiate with the bank.
Having a package deal with one of the big four banks does come with other advantages if you’re someone who likes the peace of mind and convenience of banking with a mainstream lender. In particular, Commonwealth Bank provides access for its customers through 24/7 phone, email and online banking services in addition to the largest network of branches in the country. So if you’re someone who likes to be able sit down with your bank face-to-face then this 1,100-strong network of branches should be enough to satisfy your thirst for access. Conversely, if you’d rather keep things fast and easy, applications for the Commonwealth Bank Wealth Package can be submitted via the bank’s website.
Tech-savvy customers who like to keep up to date with their finances will also find CBA’s mobile app is a user-friendly way to keep track of their finances.
Review of the lowlights
The Commonwealth Bank Wealth Package won’t be for all customers in the home loan market. If a low interest rate is your main priority in a loan, then there are other lenders out there who could offer you more competitive rates. Even with the discounts available for bundling your loan with other Commonwealth Bank products, it is unlikely that will match the lowest rates on the market.
If you are planning on paying your loan off over the maximum loan term then looking for a lower interest rate is a good strategy. If, however, you believe you will be in a position to pay off your principal faster with lump sum repayments, and you want to be with the Commonwealth Bank, the interest rate might not be as much of a deterrent.
The annual fee for the CBA Wealth Package is comparatively high when looking at the market average, and considering there are many lenders offering no annual fee for home loans this can be considered a negative aspect. Although, the fee amount is pretty much standard across the board for a package deal with any of the big four banks and in many cases it is lower than the fees associated with each individual product.
In fact, if you are a big credit card user who loves having the best rewards deals on the market chances are you already pay a hefty annual fee for this privilege. In this scenario, bundling your home loan and credit card fees may in fact be a wise money saving decision.
It is also worth noting that customers who need a low doc home loan, such as the self-employed are not eligible for the CBA Wealth Package deal.
Customers who like the convenience of banking with a big bank will find the Commonwealth Bank Wealth Package offers an attractive deal in terms of bundling a number of financial products together. If you are an existing satisfied customer of the bank, who already pays a high credit card annual fee and monthly fee for a transaction account, this loan package should be considered as a viable option as it will consolidate your fee payments and could work in your favour.
People that this package will not suit are those who are on the lookout to reduce interest rates and fees. If having your financial products with the most competitive provider on the market is your priority, regardless of the provider, then the chances are you will be able to find better deals that will save you money both in the short and long term. Even existing Commonwealth Bank customers who are not big credit card users and are not paying a high credit card fee may be better off looking for a loan that has a lower rate and charges low or no annual fees so be sure to review your options carefully.
On the upside, customers of the Commonwealth Bank can expect to receive 24/7 customer service and a cutting edge digital banking experience. Home loan customers will also find that, where possible, they will be given the opportunity to build a relationship with a home loan specialist that will be able to assist them with enquiries over the term of the loan – a service that a lot of the smaller lenders just won’t be able to offer. Working out how valuable you think this service will be to you will help you decide where your priorities lie and what you ultimately want out of your home loan.
The bottom line
Do the maths before taking out this loan to make sure you are going to be ahead by bundling your financial products. If you are not sure, it could be worth seeking financial advice to help you assess what your long-term financial goals are and whether this package will help meet them.
Note: This review provides general information about the above home loan. Any views expressed are the author’s own. It is not intended to be a recommendation of a particular product. To the extent that this commentary may constitute general advice, this advice is of a general nature and does not take into account your individual objectives, financial circumstances or needs. We recommend that before you make any financial decision you seek professional advice from a suitably qualified adviser and read the PDS. Read more about our important disclosures here.