|
Introductory Rate or ‘Honeymoon’ Loan
This loan is attractive as it offers lower interest rates than the standard fixed or variable rates
for the initial (honeymoon) period of the loan (i.e. six to 12 months) before rolling over to the
standard rates. The length of the honeymoon depends on the lender, as too does the rate
you pay once the honeymoon is over.
This loan usually allows flexibility by allowing you to
pay extra off the loan. Be aware of any caps on additional repayments in the initial period, of
any exit fees at any time of the loan (usually high if you change immediately after the
honeymoon), and what your repayments will be after the loan rolls over to the standard
interest rate.
These loans are suited to people who want to minimise their initial repayments (whilst
perhaps doing renovations) or to those who wish to make a large dent in their loan through
extra repayments while benefiting from the lower rate of interest.
Tip: If you start paying off this loan at the post-honeymoon rate, you are paying off extra and
will not have to make a lifestyle change when the introductory offer has finished.
Interested in an Introductory or Honeymoon loan? Click Here |
