Set your repayments higher so you can pay off more in the low rate period.
Introductory/ Honeymoon loan
- Offered at a low starting rate for a six to twelve month period.
- Can be variable or fixed, depending on option selected.
- After introductory period has passed, the rate usually changes to a standard variable rate.
- Loans may have restrictions, such as no redraw facilities for the entire length of the loan.
- Some lenders will fix the rate during the honeymoon period, while others will maintain a honeymoon rate that is an agreed amount less than the standard rate.
- As there are no advantages for owner occupiers it is best to pay these loans out as soon as possible.
- Check your loan details to see if there is an early pay out penalty is you pay off your loan early.
- Repayments are made up of the monthly interest on the outstanding balance, plus an amount that will reduce the principle.
- Lenders will usually impose additional fees for those who wish to pay out their loan during the honeymoon period.