PRODUCT RANKING - Pro-pack loans

‘Pro-pack' home loans remain an excellent choice for broker clients who seek an all-in-one financial solution for their home, personal and transactional needs.

PROFESSIONAL PACKAGE loans - or ‘pro-pack' loans as they are often called - have gained momentum in the mortgage market. Once restricted to certain professions, pro-pack loans are now offered to low-risk borrowers across a wide variety of occupations, including the self-employed.

Low-risk borrowers and those with a high income or significant assets are ideal candidates for pro-pack loans.

These loans generally boast lower interest rates, offering discounts on standard variable interest rates and fixed rates - and this makes them particularly attractive to borrowers.

Pro-pack loans also enable the borrower

to streamline their finances and receive a savings benefit as they are able to pay reduced annual fees and service charges on their transactional accounts.

This month, The Adviser joined with data analyst Pisces Group to rank Australia's leading pro-pack loans from both the major and the second tier banks.

In ranking the nation's lenders and their pro-pack products, we applied a process that considered not only the product specifics - such as interest rates and discharge fees - but also brokers' perceptions, including their thoughts on servicing times and overall policy.

This month's ranking evaluates the lenders and their products under some new categories, including broker service, customer service, and top three products.

The eight basic variable rate mortgages for consideration in this ranking included:

ANZ - Standard Variable Rate Loan

CBA - Standard Variable Rate Loan

HOMESIDE - HomePlus Home Loan

MACQUARIE - Premium Loan

NATIONAL FINANCE CLUB - Pro-Pack (Advantedge)

ST GEORGE - Standard Variable Rate Loan

SUNCORP - Standard Variable Rate

WESTPAC - Rocket Repay Home Loan

A WORD FROM OUR ANALYST...

"We observed that the total cost and flexibility of the packaged products varied depending on the total loan amount," Pisces business manager Sandra Nguyen said.

"Typically, the products that were more affordable had less flexibility and package benefits," Ms Nguyen said.

"The top four rankings are evenly distributed between the major banks and second tier lenders."

STAR PERFORMER

Homeside has emerged as this month's top performer overall in terms of its pro-pack home loans.

According to Davlin Finance Group's chief executive officer David Linco, Homeside "are the way to go" in providing customer service value.

Homeside scored first and second place across both loan scenarios ($450,000 and $650,000 borrowed respectively over 30 years at 60 per cent LVR).

Homeside also scored highest for product features, committed fees, interest on a $450,000 loan and package fee.

BROKER COMMENT

FYI Finance and Property director Ben White says when it comes to offering pro-pack loans, his main focus is on overall cost.

Mr White looks at the start-up costs and interest charges throughout the term of the loan as well as ongoing fees.

He then looks at the loans' flexibility, particularly whether the loan has easy access to redraw or offset facilities.

"Quite often the clients who are suitable for this product will be able to pay extra on the loan and it should not be hard for them to manage the loan ongoing," Mr White says.

Finally, he says a pro-pack loan should offer other benefits, such as a fee-free transaction account that allows for a large number of transactions without cost.

"Clients expect the pack to contain more than just rate so the other benefits must reflect value and convenience," he says.