Mortgage Home Insurance Packages – Good Option?

Many insurance options

When you are looking for a insurance to buy a home, there are many options available in the market which can be somewhat confusing. One such option is a home insurance package. It is usually a bank that offers these types of packages and provides a way to take advantage of some of the bank’s services at a reduced rate. What the bank offers is a home insurance and they add some financial products. Possibly a credit card and/or transaction account with no fees.

These packages are very attractive to buyers. Banks ensure the popularity of their packages by offering at least three products, usually the minimum required to qualify, to add to a home insurance.

sweeteners

It’s a competitive market, especially for banks who think they dominate the home insurance market, so they can hang the proverbial carrot on the home insurance interest rate discount. Since you’re on board with you, don’t be surprised to see more discounts added to your credit card interest rate, lower account fees, and while you’re there, you also get significantly reduced home and contents insurance. It’s all about saving.

The level of discount that will be offered varies between financial institutions, so it is essential to understand the pros and cons and weigh this against your circumstances.

PROS

All in one place

If you have a few different accounts and cards with several institutions, you will find it much easier to get all of your banking with one lender. Since the lender may have offered you savings on accounts, cards and your mortgage, it would not make sense to have accounts and cards at a higher rate or transaction costs with other institutions.

More discounted products

As mentioned, the big four banks hold a significant portion of the current market in mortgages and this gives them the ability to offer those blanket deals that small lenders have a hard time competing for. If you’re looking to get a home insurance from a building association or credit union, they usually offer products that they specialize in.

high income

For high-income earners, bundle deals will help build capital faster in the offset account. Interest savings can be made by combining salary reduction to interest fees and living on a credit card. Just remember to pay off the card every month!

Negatives

Imprisoned

It’s not always smooth sailing when paying off a mortgage. High interest rates, changes in lending policy and, on a personal level, problems that make repayment difficult. Also, someone offers a better deal. Skipping a home insurance package can incur costs. In fact, these costs can make moving to another lender unattractive.

the average

Don’t kid yourself that discounts on financial products will get you anywhere near the savings you’ll make when your mortgage rate drops. Repayments over 30 years add up to a huge amount of interest. Saving a few dollars per transaction or getting a lower credit card rate won’t come close to that amount. While discounted mortgage rates may sound attractive, talk to a mortgage broker or use an online mortgage calculator to compare base mortgage rates.

keep it simple

You might be better off getting a simple home insurance and not be attracted to the bells and whistles of special packages. Technology these days means accessing your insurance account online and using the re-withdrawal facility (and applicable) to pay off the mortgage faster, providing some serious interest, or if you need extra money, withdraw from that account.

Does it cost a lot?

Make sure the package deal does not contain something like an annual fee. If it carries an annual fee, determine if the total savings on lower interest rates for the life of the insurance makes you better off.

here to help

If you do not have time to do a lot of research, using the services of expert mortgage brokers, knowledge and experience is a great way to get the information you need and the best mortgage to suit your budget and circumstances. Mortgage broker services are free, and personalized service is an added bonus!