Home Loan Package

Hunter80 on 09/11/2013 - 23:13
Last edited 15/11/2013 - 20:39

Hi,

A friend has a home loan ($400K) with CBA and has equivalent amount in mortgage offset account. So basically he doesn't pay any interest at all but want to keep that home loan open as it provides him with cash buffer, just in case.

Being with CBA, has to pay about $375 or so in annual account keeping fees that is a bit of over kill. CBA will not waive off the fees. Another problem is their mortgage offset account is a separate account to everyday transaction account and you can’t transfer any less that $500 from offset account to transaction account.

Does any one have any advice about a lender that will waive of the package fees or doesn't charge it. Things that he wants are:

  1. 100 % offset account (Preferably offset with a transactional account unlike CBA, or something like ING orange saver).
  2. A fee free credit card with rewards programme (desirable but not necessary).
  3. A high interest online saver account (like Ubank).
  4. A debit card for the transaction account (desirable but not necessary).
  5. Nil cost to transfer/port the mortgage in (or some cash-back as NAB had until end of last month $1000 cash back for a transfer of loan).

Thanks for all your help.

EDIT: He has been in touch with Bankwest and was advised by one of there brokers that he can do the premium package and platinum card without any fees plus offset with a transaction account. Anyone have any experience with Bankwest that can advise on best product and what else can he expect from Bankwest?

Financial

Comments

  • Almost Banned on 09/11/2013 - 23:46

    I am pretty sure there are plenty of better options out there for your friend.
    I know my HL has a 100% offset transaction account with no monthly fee and came with a fee free credit card (no rewards though) from ME Bank so I'm sure they are out there.

  • donga100 on 10/11/2013 - 00:52

    Bankwest have exactly what you're looking for.

    • snappy1234 on 10/11/2013 - 06:30
      +3

      @ donga100

      Bankwest have exactly what you're looking for.

      100% owned by CBA how ironic…

      • cjp on 11/11/2013 - 15:28

        yeah owned by CBA but less charges than CBA. Premium select home loan gives u 100% offset account with 4$ monthly fee and free credit card (no rewards though) and debit card. Debit card u can use in any CBA ATM without any fees.

    • Hunter80 on 15/11/2013 - 23:23

      He has been in touch with Bankwest and was advised by one of there brokers that he can do the premium package and platinum card without any fees plus offset with a transaction account. Anyone have any experience with Bankwest that can advise on best product and what else can he expect from Bankwest?

      • donga100 on 16/11/2013 - 08:14

        They have a couple of options for the transaction account but I use the one that gives you free ATM withdrawls from any (Big 4?) banks. It is a free account if you deposit a certain amount each month. The android app is very easy to use and you can transfer money instantly between accounts so I normally just keep $100-200 in the transaction account and transfer money when I am about to spend it. This reduces the risk of credit card fraud and also ensures I save the maximum amount of interest on my home loan. Their call centre is based in Australia and I find them very easy to deal with if you ever need anything.

  • Geewhizz on 10/11/2013 - 07:37
    -2

    If I was your friend I reckon I would be contacting the banking ombudsman re that monthly charge.

    There are going to be charges associated with transferring the loan, regardless of how he does it, but they will no doubt be covered by little more than one or two months of that ridiculous charge.

    With ME you can transfer any amount in and out of the offset account with no trouble whatsoever.

    • earths_pacifist on 11/11/2013 - 13:03

      The $375 is annually

      • Geewhizz on 12/11/2013 - 08:50
        +1

        The $375 charge was stated as monthly at the time of my post, as per the post directly below mine.

  • DelhiBelly on 10/11/2013 - 10:29

    OP: are you sure that $375 is monthly fee not annual fee?
    I once collected home loan info from CBA and remember an annual fee of $375 for what they call a "Wealth Package".

  • Amaris on 10/11/2013 - 10:49

    The $375 fee is annual, not monthly

  • Brainwhacker on 10/11/2013 - 11:29

    Trh westpac as well, with annual fees of $350.00, no gransactiins fee and annual fee free credit card account. The difference will be in the interest rates.

  • bbqwer on 10/11/2013 - 19:35

    I had wealth package with CBA. and I received free diamond credit card fee.
    I also paid $375 annually

  • ilostnemo on 11/11/2013 - 14:21

    The $375 is not an overkill in most cases, as you receive excellent savings on your interest rates and loan service fees.

    Your friend should may consider changing the home loan to a line of credit for $400,000.
    He can then pay the 400,000 off and still have $400,000 on tap.

    Credit card, probably ing still the best.

  • Aneurism on 11/11/2013 - 15:41

    $375 annual fees to keep the account valid is reasonable considering it gives him flexibility to transfer money in and out of the offset account in a matter of seconds. The online facilities provided by CBA are decent, and the streamline and cc fees are waived as well as getting rewards from the credit card.

    If your friend uses the CC regularly, (assuming full repayment at the end of each period), your friend could be able to recuperate at about half or more of those fees worth of points.

    You might find another bank which has a lower fee schedule, but it is quite possible the online facilities might not be as good.

  • dmiser on 11/11/2013 - 20:34

    I am with CBA and paying $375 pa for the wealth package. I use the their Diamond CC (AMEX + Master Card) given to me in set of 2 (1 for me and 1 for my partner) for all our expenses throughout the year, which lets me collect points that are worth more than the annual fees. May be this is something that your friend can do. I agree with a few people not preferring to have offset linked to a Debit card directly as it always has much more amount than what you would want to risk with frequent ATM frauds. Transferring from MISA to Transaction account is a matter of couple of seconds using Mobile phone App (Android + iPhone).

  • justjules on 11/11/2013 - 21:47

    Ummm not sure if I'm missing something here but wouldn't this strategy leave your friend with a whopping tax bill every year as he earns interest on the everyday account while paying interest on a non-deductible home loan?

    If he feels he needs the cash for a future home purchase, pay of the current loan and deal with fresh finance if and when something comes along. I'm guessing however that he needs the funds essentially as an overdraft for a business he's running (not really sure what else could demand a lazy $400k lying about) in which case a deductible loan secured against the house is the way to go.

  • poopehz on 11/11/2013 - 21:52

    Your friend's $375 fee is for the Mortgage Wealth Package. He can cancel it to stop paying that annual fee without affecting his home loan in any way (since it's already on a 100% offset).

    Source: I used to work in CBA home loans.

    • Hunter80 on 11/11/2013 - 22:25

      Is there any inside information or some specific key words that he can use to get a better deal from CBA, at the moment he has Platinum card not the diamond, and as he doesn't spend a lot on CC so doesn't get many points either.

      • poopehz on 11/11/2013 - 23:05
        +2

        When he calls, have him ask the operator to put in a request to the CRU team (customer retention unit) for a better deal with whatever it is he wants. He needs to be specific about what he's unhappy about, show that there's a comparable product or service being offered by another provider at a cheaper price and obviously make the threat that he'll move banks if he's not unhappy.

  • ham on 12/11/2013 - 10:00

    Seriously, what average Joe needs a 400k cash buffer?

    Tell him to pay out his mortgage; this has to be one of the silliest things I have ever read in my life,

    If he ever needs the money he can borrow against the house if need be, or personal loan or anything.

    I would rather have the ownership of my house in my name not the banks.

  • brilliances on 12/11/2013 - 10:27

    Pay off the loan and open a line of credit / equity loan. The interest payable and $375 fee will then be tax deductible if the new loan is used for investment purposes. He only pays interest on the amount he uses from the new loan,if not the full amount.

    Otherwise convert the loan to a non package loan. The package only gives special interest rate discount but if it is fully offset then that is neglible.

    Credit cards are better sourced separately. I hv a cba diamond with no annual fees and it has an award program. I don't even hv a home loan with them!

    • Hunter80 on 12/11/2013 - 16:55

      How did you score a Diamond card without a fees and with rewards?

      • Baghern on 12/11/2013 - 19:04

        staff

      • brilliances on 13/11/2013 - 13:08

        No idea. It was part of their offer years ago to split my visa into Mastercard and Amex.

        The point is if I can hv it with no home loan surely someone wit $400k cash account can too!

        Don't bother talking to the sales team. Get transferred straight to the 'exit' / cancellation team. They are the ones with special powers to waive fees and give credits.

  • Baghern on 12/11/2013 - 11:15

    I think your friend needs to TALK with his/her loan officer/manager the package fee is waived for employees.

    Employees also received a discount, that is hard/beat to match by other banks unless you negotiate hard.

    • brilliances on 13/11/2013 - 13:11
      +2

      Not true. Most bank employees get better rates with home loans from other banks.

      • Baghern on 13/11/2013 - 13:43

        That's why I said its a negotiation.

        You won't be able to walk into another bank and they'll throw upto 0.9% off and a free wealth package equivalent, without some wheeling and dealing

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