Introductory or honeymoon rate home loans offer you a discount off the standard variable interest rate at the beginning of your home loan. The discount can be up to one percent off the standard variable rate and is usually for the first 6-12 months of the home loan.
After this period has expired, the interest rate will revert to the mortgage lender’s standard variable interest rate.
Advantages of an introductory home loan
Disadvantages of an introductory home loan
You should seek pre approval before entering into an introductory home loan arrangement. The reason is simple, building is a complex excerise requiring good co ordination and technical skills.
Lenders are aware of the complexity home builders face, and the possibility of costs over runs. This comes primarily from in-experience with managing this type of project. Hence most lenders are not generous when it comes to lending at high LVR’s on an Introductory Home Loan.
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