Are you getting the discounted rate that you deserve?
All lenders offer a Standard Variable rate loan. This is usually a fully featured loan at a rate that’s around 0.5% higher than their basic variable rate. In the past, lenders gave introductory or honeymoon discounts on this standard variable rate, but usually only for the first year of the loan.
Some time ago, lenders began giving ongoing discounts to customers based on what they considered ‘stable and profitable professions’ – typically to Doctors, Lawyers and Accountants. These discounted loans are often still referred to, as “professional packages”.
Some lenders offer packages which are branded to different industry groups, such as teachers or nurses. It is important to know that just because a loan has the name of your industry on it, it does not mean it’s the cheapest loan you can get. This is usually a marketing ploy by a lender to get you to take a mental shortcut and assume this is a better offer because it is ‘tailored’ to the needs of your profession.
In reality, whilst the rates on these loans are an improvement on the lender’s standard variable rate loans, cheaper alternatives are usually available, (often with the same lender). You should definitely consider these options, but no more than any other loan you are comparing – always look at the final cost.
You will find that nearly all lenders offer a discount package that most of their borrowers are eligible for, but these packages go by many different names. In more recent years, as well as these packages, discounts have been based on the amount that people borrowed – the larger the loan, the bigger the discount. If you aren’t borrowing enough to be eligible for a discount package or don’t fall into the right profession, don’t worry!! there could still be a discount for you! This also makes it all the more important to keep reviewing your lending options every two years.
When you organise a loan or a review through a broker like Bernie Lewis Home Loans, they will know the discount packages available to you from their lender panel and which package may be right for you. Our brokers can make sure you get the right package you qualify for, because there may be ones that your current lender isn’t telling you about.