Introductory Rate Home Loans
The Introductory Rate home loan (also known as a Honeymoon rate) has a short period, normally 6, months where the variable interest rate is reduced.
Advantages
- Your home loan repayments will still be based on the full reverting interest rate even during the introductory period, however this means that for the introductory period your home loan repayments will be paying off more of the principal, saving you a lot of money on interest in the long run.
- Due to the home loan repayments paying off more of the principal in the first 6 months, the monthly home loan repayment will likely drop after the introductory period has expired. You may have the option to continue your home loan repayments at the same amount which will further reduce both your home loan term and the amount of interest you pay. On an average home loan you may save up 18 months off your loan term and approximately $42,000 without changing a thing.
Disadvantages
- The home loan repayment amount is still calculated and paid on the reverting interest rate, so don't expect that your home loan repayments will be reduced for the introductory period.
- The reduced rate is for a limited time only.
Introductory Rate Home Loans
Mortgage House offers an extensive range of Introductory Rate Home Loans. Click on one of our Introductory Rate Home Loans below for further information.
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