Home loan packages vs basic home loans?
You probably know there are two types of interest rates – fixed and variable. But you might not realise there are three types of variable rates – standard, discounted and basic.
The standard variable rate is a lender's default option. If you have a fixed-rate loan and don't refinance when the fixed term ends, you'll probably get moved to the standard variable rate.
The discounted variable rate is a lower-cost version of the standard rate. You'll often get charged the discounted variable rate when you sign up for a home loan package, which is a bundle of products, such as a home loan, offset account, transaction account, credit card and insurance.
If you do want a discount but you don't want a home loan package, you can choose a basic variable rate instead. This is the lowest-cost variable rate and is used for no-frills home loans with very few features and add-on products.
As your broker, we can help you evaluate the pros and cons of home loan packages and basic home loans. Give us a call for more information.