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
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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.
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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
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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.
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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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