Many of the big lenders offer home loan packages to their clients. Usually the largest savings when you have a home loan package is made through the discounted interest rate available under the lenders package. A home loan package usually will also give you a free offset account, and a free credit card.
Taking advantage of an offset account and fee free credit card can save you thousands of dollars over the course of a year.
Firstly, the offset account. Having your funds offsetting your loan, regardless of how small the balance, will provide you with some savings. For example if you have a loan limit of $500,000 and have $10,000 offsetting the loan, you would only pay interest on $490,000. Interest savings on $10,000 on an interest rate of 3.90% would be $390 p/a. This might not sound like much but over the course of a 30 year loan term this becomes over $11,000. If your offset balance increases to $50,000 you would only pay interest on $450,000. Interest savings on $50,000 on an interest rate of 3.90% is $1,950 per year!
Pairing this with a fee free credit card means that your savings can sit in your account and offset your loan for longer while use the banks money. Many of the fee free credit cards have the option to be ‘reward card’, earning you points for each dollar you spend which you can then redeemed for gift cards, or airfares. To do this efficiently you need to organise an automatic payment from your account to the credit card each month so the card is paid in full and no interest is incurred (there is no charge for this feature with the major banks).If you then put all your expense s through the credit card you will earn points and save on interest. For example if your monthly expenses are $4,000 you will save $156 p/a in interest (assuming your rate is 3.90%) and you will also earn around 24,000 – 72,000 points per year. Again this might not sound like a lot but if you consider this over a 30 year term you will save over $4,000 in interest and earn between 720,000 – 2.16m points.
If you pair these tools you can potentially save.