Introductory Rate Loans
Introductory or honeymoon rate home loans provide you with a discount off the standard variable interest rate at the beginning of the loan. The discount, of up to 1% per annum, will usually be for the first 6-12 month of your loan. Introductory loans can be either fixed or variable rate.
One important thing to consider is ;once the introductory periods ends the loan will revert to a higher rate, which is usually the lender's standard variable rate. There will be fees and charges associated for early repayments or premature exit on the loan, so if your planning on taking out this loan you need to consider carefully whether the restrictions placed on the loans, are worth the very low interest rates. Contact a shape home loans consultant today to find out if this product suits your situation or not.
· Variable or fixed rate can be applied to the loan.
· Paying lower interest rate at the start gives you extra cash for other projects, such as purchasing furnitures and renovations.
· Introductory rates are usually the lowest in the market.
· Allows first home buyers to adjust to mortgage repayments.
Points to Consider:
· Break fees applies if you choose to exit the fixed period prematurely
· The rate will revert to a higher or standard interest rate at the end of the ' honeymoon' period
· The Limited features available on the loan, ie can not ch