What we like about this new home loan package

Everybody likes a discount which is why most home owners settle for a home loan package.

Suncorp has certainly made a lot of noise in this market with its latest offering - a home loan package with an interest rate discount of 1.03% pa off the standard variable rate for the life of the loan.

Suncorp's standard variable rate is currently 7.83%, meaning the rate on the packaged home loan would be a low 6.8%. Package discounts usually go only as high as 0.8%, so this discount is impressive.

For those of us not familiar with packaged loans, the lender generally combines a home loan, transaction account and often a credit card into a single package.

Lenders love them because it's a means of securing more of each customer's business, and home owners enjoy the interest and fee savings across a number of products.

Suncorp bank executive manager personal lending, Tony Meredith, said this offer was the best in the market, well below similar packages offered by competitors, including the major banks.

To be eligible for the discount you need to submit a fully completed loan application before September 30, 2011.

The interest rate discount applies to loans greater than $250,000 where borrowings are less than 80% of property value.

Discounts may be changed or lost if you vary the loan during its life.

Money verdict

The offer is available for a limited time - other than that I really can't fault it. The package is on a par with most package loans; the annual fee at $300 is actually a little less than most charge.

You only need worry about whether or not Suncorp maintains a competitive standard variable rate - no point getting such a big discount if the standard rate is much higher than most are charging. The average standard variable rate charged by the four majors is 7.78%, with NAB at the lower end at 7.67% and Westpac the highest at 7.86%.

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