Yahoo Finance ANZ is offering free Qantas flights with their home loans
ANZ and Qantas have struck a deal to offer Aussies 300,000 Qantas points if they take out a home loan of over $300,000 with the big bank.
According to Qantas, 300,000 Qantas points can get two people to New York or London; a family of four to Fiji or Tokyo; or a six-night stay at The Modern Honolulu.
On top of that, five new home loan customers will win half a million dollars to strike off their ANZ home loan.
The loan will have to be taken out before 31 August 2019 and settled by 31 January 2020.
But is it worth it?
According to Finder.com.au frequent flyer expert Angus Kidman, a loan of $300,000 with ANZ’s Standard Variable Loan at 5.18 per cent interest per annum would mean the total amount of interest due over the loan would be $235,612.58 – which isn’t too far off from the original principal amount.
Applying for a home loan? Here are 8 ways to increase your chancesWhen compared to Athena’s home loan, at a variable rate of 3.09 per cent per annum, the total interest payable would be $131,015.07, said Kidman.
So, you’re effectively paying nearly $104,600 for 300,000 Qantas points, and every 1,000 points has cost you almost $350.
But according to Kidman, the rule of thumb is that you should be getting “at least $20 worth of value for every 1,000 points”, or even up to $50 with the right kind of redemptions.
“With the right kind of redemptions, that figure can go up as high as $50. But there is literally no way in the world that you can redeem those points in a way that will get you $350 in value for each 1,000 points, which is what you'll be paying with the ANZ deal,” he said.
“It won't be possible even to just break even.”
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For example, a return business class flight to the UK would use 256,000 Qantas points. If you didn’t shop around, the tickets might cost you $10,000.
“But remember, those points cost you at least $100,000 in extra interest,” Kidman pointed out.
“It simply doesn't make sense, even allowing for scenarios such as refinancing to a lower rate in the future.”
Ultimately, what matters is the interest and fees you’re paying back, not the bells and whistles like frequent flyer points, he added.
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