What is discount margin?

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.

Also called

package discount · discount off SVR · rate discount

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