Calculate your Honeymoon Introductory Loan
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Home loan comparison
Lender | |||||||||||||
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| Variable | More details | ||||||||||||
| FEATURED | loans.com.au – Variable Home Loan 90 P&I
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loans.com.au – Variable Home Loan 90 P&I
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| Variable | More details | ||||||||||||
HSBC – Home Value Loan - Owner Occupied (LVR 70% to 80%)
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HSBC – Home Value Loan - Owner Occupied (LVR 70% to 80%)
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| Fixed | More details | ||||||||||||
Newcastle Permanent – Fixed Rate Home Loan (1 year)
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Newcastle Permanent – Fixed Rate Home Loan (1 year)
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| Variable | N/A | More details | |||||||||||
Beyond Bank – Purple Basic Variable Home Loan (<80% LVR)
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Beyond Bank – Purple Basic Variable Home Loan (<80% LVR)
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| Variable | More details | ||||||||||||
Athena Home Loans – Straight Up Owner Occupier (Principal & Interest) - Liberate (LVR70%-80%)
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Athena Home Loans – Straight Up Owner Occupier (Principal & Interest) - Liberate (LVR70%-80%)
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| Fixed | More details | ||||||||||||
IMB Bank – IMB Fixed Rate Home Loan (1 year)
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IMB Bank – IMB Fixed Rate Home Loan (1 year)
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| Variable | More details | ||||||||||||
Liberty Financial – Liberty Financial Flexible Home Loan LVR >95% (Owner Occupier)
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Liberty Financial – Liberty Financial Flexible Home Loan LVR >95% (Owner Occupier)
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- No monthly or ongoing fees
- Unlimited free redraw
- No application fee
Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of November 21, 2024. View disclaimer.
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Savings.com.au Pty Ltd ACN 161 358 363 | Australian Financial Services Licence and Australian Credit Licence 515843
Purchase: Honeymoon Introductory Calculator
This calculator provides you with an estimate of the savings you may make having an introductory or honeymoon interest rate.
Assumptions:
The savings in interest payable is the difference between the interest payable without the introductory period, and the interest payable with the introductory period.
Repayments
We assume that:
• Repayments are made on a monthly basis;
• The interest rate charge is divided equally over 12 monthly payments; and
• Interest is charged to the loan account at the same frequency and on the same day as the repayments are made.
After the introductory period, we assume your repayment amount stays the same throughout the loan term. In reality, repayment amounts can change for a variety of reasons.
What is a Honeymoon Home Loan?
Introductory home loans, also known as 'honeymoon' home loans, are mortgages that offer discounted interest rates for a set period at the start of your loan. These types of loans are ideal for first home buyers as they keep repayments low during the first few years of the loan term, helping borrowers to ease in to managing their finances with a new home loan.
After the honeymoon rate period is over, the interest reverts to the variable rate of the loan that is normally much higher. Honeymoon home loans can be beneficial in the beginning, but could end up more costly in the long run, especially once the honeymoon period ends.
It's important to be aware of the costs of repayments during and after the honeymoon period. Use our Honeymoon Home Loan Calculator to help you find out if you can afford the non-honeymoon repayment amount.
The Pros and Cons of a Honeymoon Home Loan
Below are some pros and cons of honeymoon home loans.
Pros
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Helps new borrowers ease into managing home loan repayments
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Allows for borrowers to pay off more of the principle in the initial stages of the loan to lower future repayments
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Low repayments at the beginning allow the borrower to save money while still paying for the debt
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The saved money from introductory loan rates can be used for expenses such as buying essential items needed for the house or small renovations
Cons
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The interest rates of the loan increases after the introductory period
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The increased reverted interest rate after could be unchangeable and refinancing may be costly
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There is a risk the borrower may 'feel' like the introductory rates will last forever
Before committing to any type of home loan, it’s important to do thorough research about the product to be confident that it's the right loan for you, keeping in mind your financial circumstances at the time and in the near future.
Honeymoon Home Loan FAQs
Also known as 'honeymoon period', an introductory period on a mortgage offers a discounted home loan rate at the beginning of the mortgage. After this period, the rate will revert to a higher rate for the remaining life of the loan.
An introductory home loan rate usually lasts for a period of 6 months to two years, and is generally applied from when the loan commences.
An advantage of an introductory home loan rate is that initial repayments on the loan are likely to be much more affordable compared to a standard loan, which can allow borrowers to maximise their savings during this discount period.
When the honeymoon period ends for your home loan, your interest rates may revert to higher costs. If the revert rate is too high, you can consider refinancing to make the loan more suitable for your financial situation.
Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of 9 October 2024.
^The addition of offset sub-account means your comparison rate will change.
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Savings.com.au Pty Ltd ACN 161 358 363 | Australian Financial Services Licence and Australian Credit Licence 515843