Home News The rise and rise of professional packages

The rise and rise of professional packages

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Professional packages accounted for 52% of all home loans written in the quarter to June 2007, a 12% increase from a year earlier according to a report from broker group Smartline.

The surprising statistic marks a fight back by the 'Big 4' banks that have responded to increased competition in the home loan market from non-bank lenders.

The data suggests that many borrowers see the option of paying one upfront annual fee for a feature-packed loan at a good rate as preferable to paying separate transaction fees.

Chris Acret, managing director, Smartline, said: "With recent increases in petrol prices and interest rates, borrowers are more price sensitive than ever and are continuing to take advantage of intense price competition between lenders. In many cases professional packages represent better value for money than traditional 'no frills' loans that offer lower headline rates."

Acret said that most people employed in professional industries and earning more than $50,000 per year would qualify for a professional package, but added that many people are not aware of them.

The Big 4 lenders consisting of Commonwealth Bank (CBA), Westpac, ANZ and National Australia Bank (NAB) accounted for 64% of all loans written in the quarter to June, an increase from 60% a year earlier.

The survey shows that CBA continues to lead the market followed by ANZ and Westpac, while BankWest and ING lost market share for the first time in two years after several quarters of market share gain.

Acret said: "The 'Big 4' lenders are responding more aggressively than ever to try to recapture the share they've lost to the newer entrants and they're finally starting to regain some ground."

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan

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