Alternatives to Package Home Loans
The smaller banks are now actively fighting back to regain market share post-GFC. Various institutions other than the big banks offer an alternative to a package product which discounts their member’s monthly transaction fees. It is often known as a Member Balance bonus. A member balance bonus is calculated on the amount of business you have with the institution (i.e. deposits and borrowings). Depending on your balance, you will receive a certain allowance of either free transactions or waiving of your transaction fees up to a certain amount.There is potential for loyal customers of these institutions to save a considerable amount of money per year, should they have a home loan or large deposit. An average customer will conduct 14 transactions per month with a potential cost of nearly $30. If we use Credit Union Australia’s membership bonus structure, with a home loan of $250,000, an average customer would not pay any monthly transaction fees, thanks to a bonus of 15 free transactions per month. This could save the customer $360 per year. In fact Credit Union Australia notes that 80% of their customers do not pay any transaction fees. This type of structure could be a viable option for those consumers who only require a basic home loan and access to a transaction account. The only drawback in going down this route as opposed to a package loan is that there may not be a discounted home loan rate. Package Home Loans ... |
Australia | New Zealand
