I am planning a house purchase in the New Year. What are the strategies to maximise points earnings?
Not really sure, but I guess if you are a owner builder, you could buy materials off your credit/charge card and then have the bank finance your payments (eg like progress payments)?
Good morning and happy new year! Thanks for the responces thus far I do try and sure the best interest rate first, this isn’t the first place we’ve bought so I guess I was looking if there were any clever tricks before we did our usual broker run… Never thought of doing the owner builder route and buying it all on card, the property we have in mind won’t be a build at this stage!
With big purchase like this, I would say make sure you get the lowest interest rate with the best repayment plan that meet your need rather than focus on point earn.
I know NAB has a home loan option that gives you 250000 velocity points. Sounds great but the interest rate isn’t the best in the market. When you are talking about a loan about $500k, even a 0.5% difference in interest rate is $2500 per year (and I assume you are not going to pay it back in 10 years at least, even if you can, I think many mortgage contract prevent you from paying back early), so for 10 years that would cost you extra $25000, which is a lot of money for 250000 velocity points.
Many members in the PH community have been discussing about the matter of mortgage (it’s one of our biggest money spend!), and all of us agree that most “sign up bonus offering” do not give the best interest rate and you are effectively buying points at a high price. Best thing to do is to just get the lowest interest rate rather than trying to earn points.
However, if you managed to get the lowest rate offered by different banks, I guess one of the thing you can take benefit of is to get the best FFP point earning cards for free as a package. Some of the leading cards are westpac altitude black and ANZ black that you can get it for free if you have mortgage with their respective banks. Alternatively, get the Citiprestige at the reduced annual fee if you got offered the lowest interest rate with Citibank.
Agree with Michael, make sure the points considerations come secondary to financial decisions and if you can get points, then it’s a bonus!
Only thing I can add is to see if you can put your deposit down on a credit card. It’s uncommon, but the developer we bought off-the-plan from, let me put it down over a few weeks by putting $5,000 at a time through my VISA. I just wish it was after I’d learned more from this site or I would have been able to triple the points I ended up with…
NAB’s advertised rate might not be the lowest, but if you qualify for a choice package that costs $395 per annum, the rate lowers by 0.85%, you pay no application or monthly service charges and you get one credit card fee free, which could be the Qantas or Velocity Premium Rewards card, that includes an AMEX that earms 1.5 points per dollar and a Visa that earms 0.5 points per dollar. Top that with the 250,000 bonus points and that is reasonably competitive. I don’t work with or for NAB, but have been a mostly satisfied customer for nearly 25 years, and have had upto four homes loans with them under this package over the last 16 years. Oh, and you can associate your savings account in an offset arrangement against the loan so that any cash you have is treated as if it is off the principle of the loan, saving you more in interest. YMMV, but we have be pretty happy.