Empower Pricing Update
As the first stage in the refresh of the Vow branded Empower range, we are very pleased to announce the introduction of a new pricing approach to the Vow Empower Package.
Up until now, we have had a no annual fee structure on our package which has provided the biggest benefit for smaller loan sizes. However, we have lost out in the lucrative higher loan size market when compared to lenders that offer lower rates along with an annual fee.
So, what's changing?
For applications formally approved from Monday 5th November, your clients will benefit from an overall more competitive pricing structure. From that time, there will be an annual fee of $198 introduced, however, variable rates will be significantly lower. As part of our re-refresh special offer, for loans that are formally approved up to the end of March 2019, rates will be 0.10% lower than currently available on the Vow Empower Package.
Why the change?
Of the 2017/18 settlements funded by Macquarie, our average loan amount was $465,000 and the median loan amount was $397,000. Based on these loan sizes there is a clear financial benefit from the reduced interest rate over the annual fee.
What does the annual fee provide? The $198 annual fee, which is roughly half that charged by the competition, provides up to 2 offset accounts per variable rate split (up to a maximum of 12 offset accounts). Also, the one package fee covers up to 5 separate loans for the same borrower. Making subsequent loans a full 10 basis points cheaper and improving the chances of repeat business for you. There is also a Debit MasterCard that can be set up with each offset account along with a market leading mobile banking app (iPhone and Android).
Is there a credit card provided with the package? Rather than adding unnecessary cost by providing a credit card that many clients do not wish to take, we elected to keep the annual fee to the absolute minimum. Your clients can naturally link pre-existing cards into any of the offset accounts provided for by the package.
Retention. Feedback from the retention team indicates that customers at risk are often solely rate focused as competing brokers will often brush over the benefits of no on-going fees.
Got you interested and want to know more?
Check out the rate card here, the rates on the Empower Offset product are very sharp. Your Macquarie BDM can provide guidance on how to access and submit your Vow Home Loans application.
Rates will be updated within Vow Net from next week and vow.com.au will contain a copy of the rate sheet, product information forms along with any other documentation you may need.
Questions and Answers
Q: How does this impact on existing customers and pipeline?
A: Existing settled customers and those with applications formally approved before 5th November will have existing pricing structure honoured. Should you have an existing pipeline customer (pre-formal approval) that wants to take advantage of the new pricing approach, then the applications will need to be cloned and resubmitted. Any pre-approvals & or clone resubmits after 5th November will automatically benefit from the new pricing structure, please be sure to manage your client expectations.
Q: How is the annual fee charged?
A: The annual fee or rather half the annual fee is charged (to the offset account) every 6 months in arrears based on the loan settlement date.
Q: How much is the annual fee?
A: The annual fee is $198 per annum, half of which is charged every 6 months.
Q: Does the annual fee vary according to how many offset accounts are selected?
A: No, but it is also worth noting that currently, all offset accounts need to be established as part of the application process. We strongly recommend that at least 2 offset accounts be established at application as they cannot presently be set up as a post-settlement variation.