Short video segment (Friday News Flash, Mar 4, 2022) where Karina Fox and Aaron Whybrow discuss ANZ removing its 'Break Free' packaged home loan product. They explain that the product ceases in March, existing customers will retain any discounted rates until September, and customers will be converted to another product in September. The hosts advise affected customers to review whether the annual package fee (examples cited ~3.95) still provides net benefit, especially if clients hold multiple package fees across banks.
Questions this video answers
Product ceases from March (announcement states ceasing from March).
Discounted rates continue until September; a product change will be effected from September.
Approximately 3.95 (annual package fee cited as 'the 3.95 or whatnot').
Hi, you're with Karina Fox and Aaron Wybrow from Diagnostics and Finance. We are checking in with you this week about any hot news of the press. What is the news article that we're going to be chatting about today?
Aaron, we wanted to talk about a news release that came out a little while ago, but it's starting to impact our clients. So this is about Anz removing their break free packaged product from their line of home loans.
So what is a break free package or what is a package product?
So in the home loan space, a lot of the major lenders will have an annual package fee that they will charge and then they'll try to put it into a way that you'll get extra discounts off the standard variable rate and discounts offset accounts and approval fees. And look at packaging it all into one fee instead of having a number of fees.
Okay, so for a major lender to pull a product that seems to be a premium type package, you know, what is the on flow of that to any existing customer?
Well, it's interesting in the announcement, it's not affecting the current customers right this second, but it will when we get to September. So the current customers that are getting approved right now won't get the opportunity to have the package. The current customers are going to have the package for a few more months yet and then they're going to be converted to another product in September. So it has an effect that not. Well, we could take the surface level and say they're going to save their annual package fee, but how's it going to relate to discounts?
Okay, so the information that we've got so far is the product is ceasing from March, that any discounted interest rates that existing customers have had applied from this product will continue until September and a product change will be affected from September. So essentially, if we're looking at any existing customers and existing clients that we have, everything should run pretty much as it has been so far. But we're probably looking at an opportunity to maybe review your products that you're on, see if it's still suitable for you. Is that right?
That's right. And I suppose this is a common package. Fees and major lenders are a common occurrence. When we get to review someone's home loan, we do find that there's a lot of people that could benefit from a package with a lender. And we find a lot of people probably are overpaying by having a package if they're not using all the benefits or they're multi bank and they've got package fees at different banks. So it is a thing to.
Yeah, yeah. All right. So essentially if we're looking at, you know, you're with your lender, you're on an interest rate, you've got your offset accounts, you've got your linked credit cards, everything is on set and big news announcement that your bank is removing the product offering to you. Essentially what it means is it's just going to prompt you for review. So so if this is a product that you are on, if you're with Anz or you're on a premium package and you don't feel like you're reaping the rewards for the annual package fee, the 3.95 or whatnot that you're paying then this is probably just a really good incentive for you to actually review and make sure that you are getting the best benefits for what you're paying for.
Absolutely.
Great. All right. Thanks so much for tuning in. Bye for now.
