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

Choosing the right mortgage broker in Perth

With Perth experiencing a property boom thanks to the continuing strength in the resources sector, the competition among mortgage brokers in Perth is high. For the Perth homebuyer, this is great news because the increased competition means that you will have a far better choice when choosing a mortgage broker to help you get the best possible home loan deal. Here we provide some tips on finding the right Perth mortgage broker.

Home loans in Hobart

While Hobart's housing market is strong, housing affordability has actually improved throughout 2006. Therefore, this improved housing affordability provides the perfect opportunity for new home buyers in Hobart to get into the property market before house prices rise further. Here are some tips for first home buyers in Hobart on home loans and the First home Owners Grant.

Got no financial records? Don't worry, you may still get a home loan

If you have little or no financial records, in the past you would have found it very difficult getting a home loan. These days however, there are home loan options available to you with no doc and low doc home loans. Here we take a look at the home loan options available to those without the detailed financial records normally required by home lenders.

Canberra Home Loans Mortgage Information

If you are looking for information about a Canberra home loan, you have many options available to you when it comes to choosing your home loan. Here are just three home loan options you will have when seeking finance for your new home in Canberra.

Interest only home loans lower repayments to suit investors

Interest only home loans are popular among property investors because they allow the investor to make lower monthly repayments on the home loan. This is because unlike other home loans, repayments are made on the interest portion of the loan only. Here we take a look at interest only home loans.