Intro Rate Home Loan
An Introductory Rate Home Loan (also known as an ‘Intro Rate Home Loan’) is a much lower interest rate loan for a set period of time, usually between one and three years, depending on the lender.
Having a low rate, variable interest rate home loan means:
- You can purchase your first home sooner, as you will be required to pay less interest and fewer fees.
- Usually offer interest rates of about one per cent below the standard variable rate depending on the lender.
Consider the following pros and cons before you decide on a basic home loan: Advantages of an Introductory Rate Home Loan ?
- Choice of repayments – Can be monthly, fortnightly or weekly
- Low interest rate – The interest rate is always lower than a standard variable rate loans.
- If you are on a tight budget, it can make your monthly repayment schedule easier to manage
- Lower payment for the first period of the loan.
Why Not use an Intro Rate Home Loan ?
- Once the introductory period expires the loan will automatically “revert” to a higher interest rate, usually the standard variable rate.
- Switching fees to a different loan can be much higher.
- Limited features, as this is meant to be a ‘low frills’ loan product, and is priced accordingly.