- Home loan packages can offer signifcant value, but generally only if borrowers use the included features
- Annual package fees can easily outweigh any savings
- Packaged products often increase customer inertia, making it essential to compare and reassess regularly to avoid overpaying
Packaged home loan products typically offer multiple 'extras' on top of a traditional home loan, at the cost of an annual fee. Some of these packages may work out cheaper overall while others could cost more than the value they provide.
What is a package home loan?
A packaged home loan is a mortgage product that sees borrowers also other products and benefits alongside their home loan, such as:
- A fee-free credit card
- An offset account
- A discounted home loan interest rate
- A higher interest rate on a savings account
- Access to a rewards system
- Fee waivers
- Split rate options
- Discounts on insurances, such as home and contents or landlord insurance
These package home loans tend to offer a discounted home loan interest rate and will often charge an annual, or 'package', fee. Depending on how you manage your finances, these package fees can be cost-effective, as individual products could have higher fees if taken out separately.
Can a package home loan save you interest?
There are two costs to consider when comparing a package home loan with a standard mortgage:
- The interest rate
- The fees
Package home loans usually offer a discounted interest rate and/or more options to minimise interest payable. This can make them cheaper than standard home loan products. However, that may only be the case if a borrower were to use the features on offer.
For instance, 2025 research from the University of Sydney found some borrowers with lower, inconsistent balances in offset accounts often paid more in fees or higher rates than they saved in interest.
Additionally, a 2018 report from the ACCC found interest rates at three of the big four banks were on average seven to 40 basis points lower on package home loans than the banks' next cheapest products (for owner-occupiers with principal and interest repayments). Though, package fees can eat away at any savings borne from such rate discounts and the advent of digital home loan products may have disrupted the rate benefits.
How much are package fees on a mortgage?
Home loan package fees are typically between $300 and $400 per year, though some banks and lenders charge more or less. Whether this represents good value depends on an individual borrower and their financial habits.
For instance, CommBank customers selecting the bank's Wealth Package option on its Standard Variable Rate product might realise these benefits:
| With package | Without package | |
|---|---|---|
| Annual package fee | $395 | ❎ |
| Interest rate discount | ✅ | ❎ |
| Loan establishment fee | ❎ | $600 |
| Loan service fee | ❎ | $8 per month |
| Annual credit card fee | ❎ | $96–$420 |
| Additional card holder fee | ❎ | $10–$75 |
| Top up fee | ❎ | $300 |
Source: CommBank, as of November 2025
That considered, a borrower who doesn't want a credit card and doesn't plan to 'top up' their mortgage (ergo, borrow more under the same loan facility) might be better off without the package. They might find that, by selecting a lower rate home loan product and paying the establishment and monthly fee, they're better off over the long term than if they were to pay a $395 fee each year.
The opposite is also true. A borrower who uses a full-feature credit card and wants to top up their home loan in the future could save a significant amount of money by packaging their home loan.
Why do home loan lenders offer packaged home loan products?
The ACCC's 2018 inquiry found that packages are often used to create banking “inertia” and discourage customers from refinancing their home loan. By adding more products to a loan, switching can be made more arduous than it is already deemed to be.
"[Banks] seem to be aware of evidence indicating that customers who hold multiple products are less likely to switch," the report reads.
So, even though you might have a sweet discount on a home loan package loan years ago, there’s a good chance you can get a much better interest rate by refinancing today. Here are some of the most competitive options available now:
Lender Home Loan Interest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Extra Repayments Split Loan Option Tags Features Link Compare Promoted Product Disclosure
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Can package home loans provide insurance discounts?
It's not just interest rate discounts and fee waivers on banking products that home loan packages can offer. Some come with discounts on bundled insurance products (home and contents insurance, car insurance, or landlord insurance, for example).
How to tell if a home loan package is right for you
Check the comparison rate
When assessing a package home loan product, make sure to pay special attention to the comparison rate. It melds the cost of interest and fees together, giving what's often considered a more wholistic overview of the cost of a mortgage.
Remember, however, that comparison rates consider the cost of a $150,000 home loan over a 25-year period. It doesn't consider any potential savings realised from using an offset account, for instance.
Consider if you need the features on offer
It's also worth seriously contemplating whether you'll make worthwhile use of features offered under a packaged structure.
While a home loan package fee can offer significant savings by bundling multiple fees into one, that won't do much good if you think you'd likely accrue thousands of dollars worth of credit card debt if given the chance. If you don’t need certain products, or think you can get a better deal elsewhere, then you might be better off without a package home loan.
Package home loans: Pros and cons
Benefits of packaged mortgage products
Convenience
Bundling multiple financial products together can offer a simpler process than applying and managing each one separatelyDiscounted interest rates
Many lenders offer their lowest rates on their packaged productsFewer annual fees
One single annual package fee can work out to be cheaper than multiple different fees on various productsDiscounts on other products
Packaged home loans can offer discounts on other essentials, like insurance premiumsAccess to features
Securing a mortgage offset account or fee-free redraws can help a borrower save on interest costs over the life of their loan
Drawbacks of package home loan offerings
Package fees
Packaged mortgages tend to demand hefty annual fees and therefore often have higher comparison rates than other loans.
Extra costs can outweigh savings
Discounted rates offered on packaged mortgages can be outweighed by extra costs charged to borrowers using the productsDifferent eligibility criteria
Some packaged products have different eligibility criteria than other loans, with some lenders enforcing minimum loan amounts or maximum LVR requirements, for instanceSome borrowers might not use the extras on offer
Taking out a package home loan might result in you being given access to products you don’t actually need or could find financially damaging, such as a credit cardCan make refinancing more difficult
Having lots of different products with the same bank can discourage you from switching to a better deal, even if doing so could save you more money in the long run
Savings.com.au’s two cents
Package home loans sound convenient - and they can be - but they tend to work best for borrowers who’ll actually use every inclusion. Remember: banks want to tie you down to other products they have.
It might be in your best interest to look for a ‘no frills' basic home loan product offering lower rates with fewer features over a full-feature packaged mortgage.
Make sure you compare lots of home loans from a variety of different providers - Savings.com.au can help you with that - and remember to really think about whether the products included in a home loan package will actually serve you.