Introductory or Honeymoon Rate Home Loan for Lower Interest Rates
Introductory or Honeymoon rate home loans offer a low interest rate for an introductory period, usually for the first year. An introductory rate may be as much as one percentage point below the standard home loan rate and could be fixed or variable. Once the introductory or honeymoon period is finished, the interest rate usually reverts to a higher rate. Not all honeymoon rate home loans do this, you would need to check with your mortgage broker to find out which ones do.
More Information or Assistance with Honeymoon Home Loans
If you would like more information on how honeymoon rate home loan work or any other home loans that are in your best interest call us on 13 LOAN (or +61 2 9249 3739 for international callers) or email us the form on this page and we will return your contact within 2 business hours.
How Honeymoon Rate Home Loans Work
Honeymoon rate home loans have cheaper rates because they usually have fewer options and features and the honeymoon period often has strict rules regarding how you make repayments and when you can pay out the loan. If flexibility is a major concern for you, ask about deferred establishment and exit fees so that you know what you are up for if you change your mind before the honeymoon is over.
Advantages and Disadvantages of Introductory or Honeymoon Rate Loans
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Borrowers can reduce the principal quickly by making extra repayments during the introductory period.
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Most banks charge penalties if you discharge these types of mortgages within in first 3-4 years after settlement.
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Should I Get a Honeymoon Rate Loan?
Honeymoon rates are often very good deals, but at the end of the day, you should bear in mind that cheaper interest rates don't necessarily equate to a better home loan. While a cheap rate may look attractive, a slightly higher interest rate may allow you to get a range of additional features like redraw and internet banking. Discuss your options with your local mortgage broker and you will quickly come to undetstand the different features and offers available and what they might mean for you.
More information or help
For confidential assistance with your home loan or to talk to your local mortgage broker, call us at any time on 13 LOAN or call our direct line on +61 2 9249 3739.
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