At the end of the ‘honeymoon’ period, the interest rate is likely to rise!

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.

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