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Questions and Answers
What is the percentage discount offered by the Home Partner Network for Transaction Bundled Standard discount on a Home Loan?
For what type of Discovery Bank clients is there a flat rate of 3% on purchases in the Home Partner Network?
How much is the monthly spend cap for earning Discovery Miles on purchases within the Home Partner Network?
What type of discount is available to clients using a virtual card in the Home Partner Network?
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Which factor determines the rewards earned based on purchases in the Home Partner Network?
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What determines the discount level for Home Loan double discount in the Home Partner Network?
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Where can clients earn Discovery Miles within the Home Partner Network?
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What does CIA SPE FER F O TIL UN '24 T OC stand for?
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What does PAYT stand for in Transaction PAYT?
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What determines the referral fee percentage for the Home Loan Protector?
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When is the Home Loan Protector referral fee paid to the referring party?
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To earn referral fees on Home Loan Protector, what action must the client take during the application process in the Discovery Bank app?
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What happens if the Home Loan Protector lapses within the first 24 months according to the text?
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What is a requirement to earn referral fees on Home Loan Protector sales?
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How is the referral fee percentage calculated for the Home Loan Protector?
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What is required to receive the referral fee for a Home Loan Protector policy?
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What is not a condition to be met for earning referral fees on Home Loan Protector according to the text?
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What does a lapse in the Home Loan Protector policy within the first 24 months trigger?
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'How are referral fees paid for Home Loan Protector policies?' according to the text.
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What effect do adhoc lumpsum contributions have on the future monthly repayments of a home loan?
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How does Calvin's R100,000 contribution in year 2 affect his monthly repayments?
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What is the purpose of the conveyancing, lodgement, and registration process in the home loan life cycle?
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How does an additional R250,000 contribution in year 5 impact Calvin's monthly repayment?
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What is the process of applying and choosing in the home loan life cycle typically related to?
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What is the key function of assessment and valuation in the context of a home loan?
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Which action signifies ownership transfer in the context of a home loan?
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What does termination relate to in a home loan life cycle?
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When does Calvin take a R1.5 million loan over 20 years at 10.75%?
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Study Notes
Discovery Bank Home Loan Fundamentals
- The Discovery Bank Home Loan offers clients the ability to take ownership, repay the loan, and access additional credit over time, eventually settling or terminating the loan.
Home Loan Statistics
- Total limits: R400 million (unsecured), R14 billion (secured)
- Average limit: R63,000 (unsecured), R47,000 (secured)
- Average transaction value: R1.7 million (average loan limit size), R1.3 million (average balances)
Mispricing of Current Home Loans
- 60% of clients are currently overpriced on their existing home loans
- Average pay off period: 8 years or more
- Typical mispriced client profile: average client age at origination 35.8 years, current age 40.5 years, with an average loan limit size of R1.7 million
Opportunities for Existing Discovery Bank Clients
- Existing clients hold over R270 billion in home loan balances with other providers, offering significant opportunities for Discovery Bank
- Average balance: R1 million each, with a potential opportunity of R10 billion
Home Loan Life Cycle
- Unpacking the home loan life cycle: offer to purchase, applying and choosing, assessment, valuation and letter of acceptance, conveyancing, lodgement and registration, ownership, further lending, repayment, and termination
- Repayments: basic monthly instalment amount, calculated monthly based on interest rate, outstanding balance, and remaining term
- Repayments can be reduced by making adhoc lump sum contributions, which reduce the future monthly repayments of the home loan over its lifetime
Home Loan Protector
- Covers clients for death and a tailored set of objective medical criteria for illness and disability
- Decreasing term assurance, with a sum assured that decreases at each anniversary, and a level premium throughout the term of the policy
- Value proposition: up to 0.25% reduction on the interest rate, and up to 0.5% reduction including Discovery Insure's reduction
Referral Fees on Home Loan Protector
- Referral fee: up to 15% of the first year's premiums, once-off, based on the loan term and home loan value
- Clawbacks: occur on a pro-rata basis if the Home Loan Protector lapses within the first 24 months of ongoing monthly premiums
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Description
Test your knowledge on the fundamentals of Discovery Bank Home Loan, including applying for the loan, accessing additional credit, settlement process, insurance options, and sales requirements. Explore case studies and opportunities involved in expanding Discovery Bank lending suite.
