Review - Westpac Flexi First Option Home Loan
Product launched February 2009. Review published 22 June 2009. Please read our disclaimer.
A home loan or a fully-featured package? That’s the problematic question facing many home buyers. Often, a basic mortgage instantly appeals because of its lower interest rate. The trade-off, however, can often be the lack of flexibility, such as redraw facility, which you may require down the track. If you borrow enough to qualify for a package, on the other hand, you may get lots of options including a discounted interest rate, free redraw, offset, loan top-up and portability. These options often come with an annual package fee. If you don’t expect to use these features like top up, redraw and portability, you may well decide the benefits don’t justify the annual fee. You might not even qualify for a package in the first place. The Westpac Flexi First Option Home Loan aims to bridge the gap between the two loan types. Flexi First Option is a basic home loan with a low interest rate of 5.11% p.a. (Comparison rate 5.16%) and no annual service fee or monthly loan maintenance fees. What makes it different is that you retain the ability to redraw, split the loan, top up and use many of the popular features of a packaged loan. Instead of paying for these features in advance by way of the package fee, you pay only if and when you use them. 
WHO DOES THIS SUIT?Borrowers looking for a cost-effective home loan will find this product appealing. The Westpac Flexi First Option Home Loan, with its low interest, no-ongoing fee structure may suit home buyers who like the idea of being able to access features they may need later on, paying only for those features when used. For instance, the progress draw facility provided with this loan can be used for building work. There is also the ability to reduce repayments by up to 50% for maternity/paternity leave^, extended holidays and renovations# or take a repayment holiday if you are ahead of your repayment schedule.First home buyers eligible for the First Home Owners Grant will benefit in addition as Westpac is currently waiving the $600 application fee on this loan (available for a limited time). In addition to the attractive interest rate, an investor will be drawn to this loan because it permits interest-only payments for up to the first 10 years. USEFUL LINKS
HOW DOES IT WORK?Westpac’s Flexi First Option Home Loan is a basic home loan offering a low variable interest rate of 5.11% p.a. (Comparison rate 5.16% p.a.) and no annual service fee and no monthly loan maintenance fee. It offers the customer a choice of features provided on a fee-for-use basis. These features include redraw facility, top up of the existing loan, progressive drawdowns when building for payments to builders and other contractors, and portability (ability to change properties whilst maintaining the same loan account).Furthermore there is an ability to reduce payments up to 50% for purposes such as parental leave^, extended holidays and renovations #, for a period of six months. Home loan borrowers may make use of these options by paying for it at the time of use. FEATURES*
THINGS TO CONSIDER
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