Victorians looking to refinance could score a year of free electricity

Posted: 2 July 2018 4:50 pm
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You can get up to $3,000 in electricity costs covered if you refinance to a Bank of Melbourne Advantage Package home loan and sign up with Red Energy.

Australian electricity prices have been increasing for a decade, and until recently, property prices have been rising even faster. This makes the new refinance offer from Bank of Melbourne an interesting proposition for the right borrower.

Eligible Victorian residents who refinance to the Bank of Melbourne Advantage Package Loan can get 12 months of their electricity bills paid for, up to the value of $3,000. This equals more electricity than most Victorian households consume.

There are a few qualifying details about the offer, most notably that it's only for Victorians. Here's how the deal works:

  • You need to refinance to a Bank of Melbourne Advantage Package Home Loan (rates start at 3.89% for the 2-year fixed package loan).
  • You need a minimum loan size of $250,000 and will have to pay the $395 annual package fee.
  • You also need to switch your electricity provider to Red Energy, a Victorian electricity, gas and solar provider.
  • You cannot refinance from within the Westpac group. That means you're not eligible for the deal if your current loan is with Westpac, St.George, BankSA, RAMS or another Bank of Melbourne loan.
  • You need to apply between 1 July and 31 August 2018 and settle by 30 September 2018.

Is it worth the switch?

Refinancing is a good idea for almost every Australian with a mortgage. Many borrowers don't even know their current interest rate, and a difference of just a few basis points can save you tens of thousands over the life of a mortgage.

Keep in mind that while $3,000 in electricity savings is very good news, it is a one-off deal. Focusing on getting a lower interest rate could save you more money elsewhere.

You also need to consider that the Advantage Package loan is, well, a package loan. You'll also need a Bank of Melbourne transaction account and a credit card. There are discounts in the form of waivers plus the convenience of having your main financial products bundled together. But there could be other mortgages worth switching to. It all depends on your specific goals and needs. There's no substitute for doing the hard research and comparing for yourself.

You can learn more about the Bank of Melbourne offer here.

Learn more about refinancing and compare your options

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