Should I pay an annual fee?
There are two kinds of home loans, packaged and basic. But, should you pay your home loan annual fee? In this article, we share with you a quick overview that can help you save.
Packaged loans are offered by the banks where for paying an annual fee of $395, your loan comes with a free offset account and a fee waiver for a platinum credit card, with no other fees. They’re all pretty much the same but just with different names (CBA Wealth Package, NAB Choice Package, ANZ Break free Package etc).
If you refinance your loan to them and are happy to take a packaged product, they’ll often give you a $2,000 rebate.
The benefits of an offset account which is linked to a credit card can be beneficial for many, but these days it’s worth considering basic products given the interest rate is often cheaper! And there are no fees to pay, at all.
We recently presented some option to a client who was surprised they could get a basic variable rate of 2.49%, which is cheaper than the variable rate he would have got under a package.
He already has a Credit Card so doesn’t care about not getting another, and he doesn’t really need an offset account as he’s happy to keep using his everyday savings account that he’s had for ages.
And amazingly iChoice can arrange from some of the banks a $3,000 rebate if you switch to them even if you choose to take up their cheaper, basic product!
A 2.49% variable rate with no fees at all and a $3,000 gift – not bad.