Home Loan Frequent Flyer Schemes

isthisreallife22 on 24/05/2018 - 01:03

Currently looking at new homes and there are some nice rates out there atm. I should be able to go < 3.7% quite easily.

One thing I am querying is whether it's worth "paying extra" to accumulate FF points.

Case in point Macquarie. Their scheme is:

  • 10,000 Qantas Points for every $100,000 drawn down at settlement as an introductory gift (calculated to the nearest point)
  • 1,000 Qantas Points each month the outstanding loan balance is at least $150,000 on the last business day of the month.
  • A bonus 25,000 Qantas Points on the third and fifth anniversaries of the loan, calculated from the day of settlement, as long as the outstanding loan balance is at least $150,000 on the last business day of the anniversary month

Which sounds great, but, you are charged a higher interest rate in order to access these benefits.

Just trying to figure out "how much more" it would be worth paying in order to enable this.

Has anyone been through this, and have any learnings or recommendations?

Financial

Comments

  • audz on 24/05/2018 - 01:36
    +1

    There's a Virgin Money promo on at the moment until 31/5/18. Similar to the Macquarie deal, but 20k points for every $100k settled.
    3.64%

    I'm not sure which points are worth more (Qantas Vs Virgin).

    https://virginmoney.com.au/content/virginmoney/en/partners-h…

    • nubix on 24/05/2018 - 08:14
      +2

      20k Velocity is definitely worth more than 10k Qantas. Personally even prefer Velocity to Qantas at 1:1

    • knobbs on 24/05/2018 - 08:51

      That has to be OO and over $750,000 to get the rate. Just putting it out there for people to see. It is also fulfilled by BoQ

      • isthisreallife22 on 24/05/2018 - 09:00

        Even between 500 and 750 is only 3.68

        It seems pretty incredible actually?

        • knobbs on 24/05/2018 - 09:19

          Yeah it's not bad, the bonus points surely are a nice incentive. I would still shop around a bit though because ING have their $1500 cashback for loans. Not sure on the rate though might be worth more than the points.

        • tunzafun001 on 25/05/2018 - 00:47

          @knobbs: The issue will be dealing with Virgin Money, who have to deal with BOQ. Couldn't find anyone who is with them. Only negative reviews out there.

          Plus it's $120 for the privilege per year

      • audz on 24/05/2018 - 15:24

        3.68% if OO and less than $750k :)
        $75k-$749k

        • isthisreallife22 on 24/05/2018 - 16:33

          Oh yeah. Pretty good given full offset as far as I can see. Fees relatively low also?

  • chumlee on 24/05/2018 - 06:20
    +3

    Debt should never become attractive.

    Just get the best rate you can. The rest is like QFF points is to draw in the suckers

  • mskeggs on 24/05/2018 - 06:49

    QFF points are worth about 1c each, if you sell them for cash.
    I wouldn’t pay extra interest for them.

  • isthisreallife22 on 24/05/2018 - 08:55
    +1

    So far it's looking like you might come out slightly ahead in the first year (e.g. get about 100,000 points for about $450 extra interest) but after that you'd want to revert to the non FF scheme pronto (which may be a little bit challenging if you stay at same lender?)

    • carwashhair on 24/05/2018 - 09:21
      +1

      This. I'd look at max points extraction within say 12-18 months, and then change loans/lenders for lowest rate possible. Factor in any break/exit fees into the points gained.

  • isthisreallife22 on 24/05/2018 - 08:59

    (oops double post)

  • marcusv on 24/05/2018 - 09:26
    +4

    Banks are not known for being generous. They are not free points, their cost will be factored into your loan somehow. Look for the best loan, not the best deal on frequent flier points.

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