What is discount margin?
Discount margin is the percentage discount a lender offers off their standard variable rate as part of a package or promotion — typically 0.50-1.20% on home loans, lifting it to 1.50-2.00% for the largest premium-banking customers.
Discount margin (sometimes called 'package discount' or 'rate discount') is the percentage discount a lender applies to their standard variable rate as part of a discounted product or professional package. The effective rate the borrower pays is SVR minus discount margin.
Typical 2025-26 home loan discount margins: 0.50-1.20% for standard package customers, escalating to 1.50-2.00% for premium-banking ($1M+ portfolio) and broker-introduced loans above $1M loan size. Some non-bank lenders offer even larger advertised discounts but apply them to higher SVRs, so the effective rate is similar.
Discount margin is negotiable at application — brokers commonly secure an extra 0.05-0.15% beyond the published package discount through lender relationships and volume. The discount is also retainable on refinance: when you switch lenders, the new lender sets a new discount margin which can be sharper than your old one if rates have moved.
package discount · discount off SVR · rate discount
- Standard variable rate (SVR) — The standard variable rate is each lender's reference variable interest rate — the public benchmark off which package di…
- Professional package loan — A package loan bundles a home loan with a transaction account and credit card under one annual fee (commonly $395-$495) …
- Variable-rate home loan — A variable-rate loan moves with the lender's pricing decisions and the RBA cash rate cycle — the rate (and your repaymen…
General information only — not personal financial advice. Verified against https://ratesniffers.com.au/glossary on 2026-06-01.