A great option for first home buyers or those looking to minimise their initial home loan repayments, the introductory rate home loan offers a significantly reduced interest rate for the first 6 to 12 months. Once this introductory period is completed, the interest rate generally reverts to the lender’s standard variable rate.
With a lower introductory interest rate and lower repayments for the initial period, you can free up more cash to put towards other expenses such as decorating, buying furniture and appliances or landscaping the garden.
Introductory rate home loans can have disadvantages such as restrictions or exclusions on the available features. Many introductory rate loans have higher early repayment or exit fees, particularly during the first four or five years following the initial period so it is worthwhile thinking ahead when deciding which loan option is best.
