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Intro Rate ‘Honeymoon’ Loan
An introductory rate loan generally offers a guaranteed low rate for an initial period of time (usually 12 months) after which most will revert to the standard variable rate. The rate can be fixed or variable.
Advantages:
- Usually the lowest rates on the market.
- Some lenders provide offset accounts on these loans.
- Opportunity to reduce the principal quickly during the ‘honeymoon’ period.
Disadvantages:
- Payments will increase after initial introductory ’honeymoon’ period
