Introductory or Honeymoon Loan
Enjoying an introductory low interest rate on your home loan can help you years into home ownership or rebuild your cash stores if you have just scraped together all your spare funds for a loan deposit. As with any loan feature you need to consider whether you are suited to a honeymoon loan and make sure you know how to maximise the benefits of a low introductory interest rate.
Easy Honeymoon Home Loan
Apply for a Easy Street Honeymoon Home Loan and enjoy no annual fees, no account keeping fees, 100% offset account, an unlimited redraw facility and the ability to make additional repayments.
- Interest Rate of 6.29%
- Comparison Rate of 6.57%
- Application Fee of $500
- Maximum LVR With LMI: 95%
- Minimum Borrowing: $100,000
- Maximum Borrowing: $0
| Home Loan | Details | Interest Rate (p.a.) | Comp Rate^ (p.a.) | App Fee / Ongoing Fee | Max LVR | Min & Max Borrowing | |
|---|---|---|---|---|---|---|---|
 Easy Street Honeymoon Home Loan Special |
Get a discounted fixed interest rate for the first 12 months while you settle in to your new loan | 5.89% | 6.56% | $500 / $0 | 95% | $100,000 / $2,500,000 |
 
|
 Community First Honeymoon Home Loan |
A low fixed rate home loan for the first 12 months with no annual fee, no account keeping fee. | 5.89% | 7.10% | $500 / $0 | 80% | $50,000 / $1,000,000 |
|
Features Of Introductory Honeymoon Rates On Home Loans
Despite the name honeymoon loans are not just aimed at newlyweds buying their first home. While first-time buyers can benefit from a lower introductory rate you can choose a honeymoon rate on your first, second or third home or even your investment property. First though you will need to consider whether the other features of an introductory home loan rate suit you:
- A honeymoon rate is usually the lowest you’ll find anywhere. An introductory honeymoon rate is going to look very competitive when you compare it to the standard interest rates offered on other loans, even on the other loans from the same provider. However a honeymoon rate is so low because it is for a limited time. Common honeymoon periods are 12 months, but some may be for a short as six months and others can be longer, up to 3 to 4 years.
- A fixed discount honeymoon rate option. This is one type of introductory interest-rate you may find on a honeymoon home loan. The interest rate on the loan will be variable, but will be fixed at a certain discount level below the bank’s standard variable rate. Therefore while you’re interest-rate will move with the market during the introductory period, it will remain discounted.
- The discounted fixed rate option. In this case the rate is fixed for the entire introductory period, and it won’t move from its lower rate.
- Extra repayments may be capped during the honeymoon period. Making additional repayments to your home loan makes good financial sense, however some home loan lenders will cap the amount or value of additional repayments you can make during the introductory period.
- You are likely to pay exit fees if you refinance during the introductory period. There are likely to be substantial exit fees if you pay out your loan or refinance during the honeymoon period. This means that you can’t follow introductory home loan interest rate offers from one lender to another.
- The interest rate will revert to the lender’s standard variable rate. A standard variable rate is usually one of the highest rates on offer from a lender so compare both honeymoon rates and the standard revert rate.
How To Know You Are Suited To Introductory Or Honeymoon Loan
While many lenders will offer an introductory discounted interest rate, you also need to be sure that the entire loan suits your needs once the honeymoon period is over. You may be suited to a honeymoon loan if:
- You have just saved up a large deposit. Getting a deposit together is just one of the hurdles of getting a new home loan, because once you alone has settled and then activated you now need to be able to service the repayments. If you don’t have a lot of spare cash and don’t want to be spending a lot on your loan as you try and rebuild your savings, an introductory low interest rate and lower repayments can suit you.
- This is your first home loan and you want to adjust to the system. While you may have had personal loans or credit cards in the past repaying a home loan is a completely different situation. With a honeymoon loan you can ease into what is required of you as a mortgage holder, with a little spare room in your repayments to start with.
- You are able to pay more and get ahead. If you have the spare cash to make repayments at the standard amount they will be when you’re interest-rate reverts to the standard variable rate, you can get ahead during the first year of your home loan by paying extra. Just make sure that you have a spare cash available for these extra repayments, and that your honeymoon loan allows you to make additional repayments fee free and uncapped.
Applying for a home loan can be hard work, and once your loan has settled a new type of hard work begins as you concentrate on repaying your loan as quickly as possible. However if you think you would like to take a little honeymoon from the stresses of managing your mortgage, a lower introductory interest-rate and lower repayments may suit you.
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