Is a Professional Package Still Worth It?

For years, the professional package has been a staple of Australian home lending. Pay an annual fee of roughly $300 to $400, and you'll typically get a discount of around 0.6% to 0.7% off the standard variable rate, a waived application fee, a free transaction account, and a bundled credit card with the annual fee waived. On a $600,000 loan, a 0.65% discount is worth around $3,900 a year in interest, which dwarfs the fee on its own. The basic maths still favours the package for most borrowers with a reasonable loan size, and it is usually the first place I start when reviewing a client's lending structure. But the value of the bundle has always been a combination of the rate discount and the extras, and it's the extras that are now under pressure.

The pros begin with that rate discount, but they don't end there. A package rate is often the most visible benefit, yet the fee waivers on a second credit card, an offset account, or additional loan splits can add up to a meaningful sum. Historically, the bundled credit card was the sweetener: a fee-free premium card with points, complimentary travel insurance, and airport lounge access made the package feel like a bargain. However, that part of the proposition is eroding. Card issuers are cutting the benefits attached to premium cards, reducing points earn rates, raising spending thresholds for bonus points, and in some cases removing complimentary insurance altogether. Meanwhile, the Reserve Bank's reforms to interchange fees and card surcharging have changed how merchants price card payments. Surcharges can be limited or removed in future, but in the meantime, many retailers still pass on card costs, which reduces the real return on rewards spending. If you were relying on the card to justify the package fee, that case is weaker than it was five years ago.

The cons, then, are largely about paying for things you no longer use or value. If the credit card in your package is a stripped-back version with minimal rewards, or you've already moved your spending to a debit card or another product, you're effectively paying the annual fee for the rate discount alone. That can still be a good trade on a large loan, but it is a poor one on a small balance. On a $250,000 mortgage, a 0.65% discount saves roughly $1,600 a year, which shrinks the benefit after the fee and leaves little margin if a competing lender offers a sharper no-fee rate. There is also the lock-in risk: packages can be tied to one lender, and leaving may mean paying discharge fees, losing the bundle, and restructuring your accounts. With many lenders now offering low-fee or no-fee loans with discounted rates for new customers, the gap between a packaged rate and the market has narrowed, and you should test it rather than assume it.

My practical advice is to treat the package as a rate decision first and a rewards decision second. Start by calculating the dollar value of the discount against the annual fee, then add only the benefits you genuinely use, such as the offset account or fee-free card. Next, compare the effective rate against the best non-package and refinance offers in the market, because your current lender's package may have drifted above what's available elsewhere. If the numbers favour the package, keep it, but stop valuing it on the old credit card perks that are disappearing. If they don't, ask your lender to match a competitor's rate or waive the fee, as banks will often negotiate to keep a customer who shows they're prepared to leave. Review this every year, since the credit card landscape is shifting and so is the value of the bundle.

This information has been prepared by PHA Financial Services and does not take into account your objectives, financial situation or needs. Before acting on this information you should consider whether it is appropriate to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. The information provided was accurate at the time of publication and changes in circumstances after a document is published may impact on the accuracy of information. Some information may have been collated from various third parties and we make no assertion that the information was originally ours.