Introductory Rate Home Loans

Discounted interest rate for 1 to 3 years, then what...

Introductory rate (honey-moon home loans) offer a discount on interest rate in the first 1 to 3 years and later revert to a higher variable rate.

These loans are often used as sweeteners for lenders to attract business; however, the devil is in the detail. The savings made in the first year is often regained by a combination of higher interest rate after the introductory term, high get in and get out fees, high switching fees or exit costs.

What to look for...
• A low initial interest rate which later reverts to a significantly higher interest rate after the introductory term has

ended

• Very high entry, exit fees or change of product fees

• After the introductory term has ended people often forget to change their loan incurring a higher interest rate

• Restrictions on refinancing or switching products without severe penalties

• Restriction with extra repayments and other features such as offset and redraw

Advantages

Disadvantages

• Low initial interest rate to make extra repayments to pay

down the loan quicker

• Lender allows to change product with out excessive

fees

• Ongoing interest rate is competitive to most basic and

professional packaged loans

• Refinancing or changing loans can be expensive

• Paying a higher interest at the end of the introductory

period

• Restrictions on extra repayments

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Lenders Basic Homes, Fees and Features...

Lender		Home Loan to Look Out For
Note: Many More Lenders Available. This is just a representation of some of Australia's most longest standing lenders that offer ongoing competitive rates. Please discuss other lender options with your mortgage consultant.
MAJOR BANKS
	ANZ Bank Home Loans	1 year introductory rate available
	Commonwealth Bank Home Loans	1 year guarantee rate, 12 month discounted variable rate and 3 year discount rate saver
	NAB Home Loans	3 year variable and fixed rate home loans and 12 months discounted variable and fixed rate mortgages
	Westpac Home Loans	Flexi First Option Home Loan - $600 upfront fee, nil ongoing fees and $25 redraw fee
	Homeside Lending NAB Home Loans	No introductory rate loans available
SMALLER BANKS
	Adelaide Bank Home Loans	No introductory rate loans available
	AMP Home Loans	1 year variable and fixed discounted rates
	Bank West Home Loans	Mortgage Shredder 1 year introductory fixed rate loan
	Citibank Home Loans	6 months fixed discounted
	ING Direct Home Loans	No introductory rate loans available
	St George Home Loans	12 month variable discount under Advantage Package
	Suncorp Home Loans	12 months discounted variable and fixed rate mortgages
BUILDING SOCIETIES
	Heritage Bank	No introductory rate loans available
	The Rock Building Society	No introductory rate loans available
OTHER LENDERS
	Homeloans Ltd	No introductory rate loans available