Introductory home loans offer highly competitive interest rates - But whats the catch?

With the intense competition in Australia's home loan market today, home mortgage lenders are working harder and harder to capture our attention in order to win our business. One of the ways in which mortgage lenders attract our attention is by offering introductory loans with low interest rates for a period of usually between three and 12 months. Here we take a look at the introductory home loan detailing the benefits & pit falls of such an offer.

DOMDocument::loadXML(): Start tag expected, '<' not found in Entity, line: 2

Looking for a great value home loan with super fast approval?

Get Pre-Approval online & get a response in minutes with MyRate.

Introductory home loans and the honeymoon rate

The introductory home loan offer (also known as a honeymoon rate) provides borrowers with a highly competitive interest rate, generally for a period of between three and 12 months. These introductory home loans are designed to both attract new home buyers as well as to lure existing home borrowers away from their existing mortgage provider. At the end of the honeymoon home loan period, the interest rate on the mortgage will generally revert to the standard variable home loan interest rate of the mortgage provider.

When considering an introductory home loan

If you are considering to take out a new home loan, then it will definitely pay to find a mortgage provider who is offering a highly competitive introductory home loan rate. Shop around and compare the different mortgage providers for the best deal. But, you must be careful here. You should not choose a home loan based purely on the low interest rate provided in the honeymoon introductory period. You should also carefully consider the standard variable interest rate that the loan will revert to once the honeymoon period is over. Also, calculate your repayments on this higher amount, as this is what you will be paying in three to 12 months time when the honeymoon rate expires.

Likewise, if you already have a home loan with another mortgage provider, carefully consider whether you will be better off in the longer term before deciding to switch to another lender in order to take advantage of their introductory home loan offer. Will the standard variable interest rate remain lower than the rate you are paying now once the honeymoon period is over? And what fees or penalties will you incur by paying out your existing home loan early?

DOMDocument::loadXML(): Start tag expected, '<' not found in Entity, line: 2

Digg this Post page to del.icio.us Post page to Furl

Introductory home loans reviewed A low rate but whats the catch

Home Loan Info.com.au

Home Loans Australia

Refinancing Information

Home Loan Information

Mortgage Broker Information

Featured Home Loan Information

Mortgage brokers in Australia

Mortgage broking in Australia has boomed over the past decade with the growth in more competitive and more complex home loan options. Mortgage brokers in Australia provide a valuable service to many home buyers who do not have the time or means to fully research their home loan options by themselves and employing the help of an expert in the field can be beneficial. Here we provide an overview of the mortgage broker industry in Australia as it becomes increasingly important to consumers.

First home buyer's loans reviewed - Getting into the property market

The increasing cost of real estate across Australia is making it increasingly difficult for first home buyers to get into the property market. With this in mind, home lenders have come up with more innovative loan options in order to help first home buyers get into the property market. Here we look at some of the first home buyer loans available today that are helping more Australians get into their first home.

Finding a home loan in Melbourne

Are you searching for the right loan for your new home in Melbourne? In the highly competitive market of home lending in Melbourne, there are many options available. Here we look at three of your home loan options: standard variable rate home loans, low doc home loans and loans from non bank lenders.

Finding the right mortgage broker in Brisbane

So, you've started looking for your new home in Brisbane. You've found a home that you and your family love and now it's time to arrange the finance. If you don't have the time to do all the research from the hundreds of home loan options available yourself, then it may be a good idea to get professional help from a mortgage broker. Here we provide some tips on finding the right mortgage broker in Brisbane.

Brisbane Home Loans Mortgage Options

When house hunting in Brisbane, there are a number of home loan options available to today's home purchaser. Fixed, variable or split rate home loans, the list goes on, but where to start? Here we take a look at some of the options to help you find the perfect home loan in Brisbane.