CBA Wealth Package Wrapped Up

In the same way that cosmetic counters offer promotional gifts to customers spending over a certain amount, banks offer professional packages, such as the Commonwealth Bank's Wealth Package, to reward customer loyalty.

CBA's Wealth Package is available to existing borrowers who have holdings (which can include CBA loans, bank deposits and investments) of at least $150,000 and who have their main source of income deposited to a Viridian Line of Credit, or a transaction account with the bank.

Designed for low-risk borrowers, professional packages such as the CBA Wealth Package generally offer a discount off the standard variable interest rate for home loans. CBA offer bigger discounts depending on the amount being borrowed.

For example, borrowing between $150,000 and $250,000 with CBA's Wealth Package would mean a 0.40% per annum discount on the variable rate. A loan of up to $500,000 attracts a 0.50% per annum discount, a loan of over $500,000 would receive a 0.60% per annum discount and loans of over $1 million mean a 0.70% discount.

An interest rate discount may sound like a great deal, but bear in mind that the Wealth Package restricts your home loan options by limiting the number of loans available. The interest rate discounts do not apply to a long list of loans - One Year Guaranteed Rate Home Loans and Investment Home Loans, 6 Month Discounted Variable Rate Home Loans and Investment Home Loans, 12 Month Discounted Variable Rate Home Loans and Investment Home Loans, Economiser Home Loans and Investment Home Loans, 3 Year Special Economiser Home Loan and Investment Home Loans, Rate Saver Home Loans and Investment Home Loans or Low Documentation Home Loans and Investment Home Loans.

Wealth Package borrowers are exempt from paying the upfront home loan establishment fee which is usually $600, but would need to pay the Wealth Package annual fee, which is currently $300. If your loan is repaid in full within four years, a deferred establishment fee may be payable, and if you chose to switch to another CBA loan type, a switching fee would apply.

If you are happy to have a range of your financial services tied to one lender, a professional package may be of benefit to you, but many borrowers prefer to have more freedom in the types of products they choose. Depending on your financial situation, you could find a better home loan deal with another lender, so be sure to shop around and explore all of your options before committing to a package deal.

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