Package home loans and annual fees, when they pay off

What we could and could not verify

We did not find an official Moneysmart or ASIC page that defines "package home loan", so this guide does not describe what packages typically include or what they typically cost. What each package includes, and its fee, is set by the lender. Read the product disclosure and the Key Facts Sheet. Moneysmart's page on choosing a home loan describes ongoing fees as "fees charged every month or year for administering a loan, also called service or administration fees", which is the category an annual package fee falls into.

The break-even sum

The package fee is a cost every year. The discount is a saving every year. Work out which is bigger.

1. Get the interest rate and fees for the package loan.
2. Get the rate and fees for the same lender's loan without the package.
3. Multiply the loan balance by the rate difference. That is the yearly interest saving.
4. Subtract the annual fee and any other extra costs.

RateSonar's arithmetic on a $600,000 loan over 30 years with principal and interest repayments, holding rates constant: each 0.10 percentage points off the middle advertised standard variable rate (6.74%, as at 2 Nov 2026) saves about $477 a year.

An illustrative round example, not a market figure: suppose a package carried an annual fee of $400. On the $600,000 loan the discount has to be worth more than $400 a year. That needs a rate cut of about 0.07 percentage points ($400 divided by $600,000). On a $300,000 loan the same fee needs a cut of about 0.13 points ($400 divided by $300,000). Smaller loans need a bigger discount to cover the same fee.

Use your own loan size and the lender's real fee. The $400 here is a round number to show the method.

Fees and features to ask about

• The annual package fee, and when it is charged.
• The rate on the same loan with and without the package, written down.
• Whether the discount is permanent or applies for a set time. See honeymoon rates.
• Which other fees are waived (application, monthly or offset fees), and which still apply.
• Whether the package needs other products with the lender, and whether those products are priced competitively.
• Whether the offset account is included. Our guide to offset accounts shows how to value it, and Moneysmart warns that some banks charge for offset features through higher rates, account fees or both.
• Any discharge fee if you leave. See home loan fees explained.

Comparing a package fairly

Put the package loan next to a standard loan in a short table with the rate, the yearly fee, the offset and the fees to start and to leave. The comparison rate can help because Moneysmart says it combines interest and most fees into one figure, but it depends on assumptions, so see our comparison rate guide. Then check the rates for similar loans on the home loan rate board and in compare rates.

Mistakes to avoid

• Paying the fee on a small balance. The smaller the loan, the harder it is to earn the fee back.
• Valuing features you do not use. If you will not use the offset, do not count it.
• Ignoring that the standard loan may also be negotiable. See how to ask your bank for a lower rate.
• Forgetting the fee continues. Re-run the sum each year, especially after your balance falls or you refinance.

RateSonar shows advertised standard rates. It does not recommend a lender or a package, and lenders' policies differ, so check your own lender.