First Home Loan

The Federal Government’s introduction of the First Home Buyers Grant Boost has created a demand in the lending sector for home loan products specifically for first home buyers. This is often in the form of an ‘introductory loan’, also known as a ‘honeymoon rate’. These home loans start with a discounted interest rate, but will revert back to the standard variable rate after a short term, between 6 months to 3 years.

The introductory period can be used as an advantage to ease you into making your regular mortgage repayments and to pay for other household items which you may need to get you started. But there is a catch. Exit fees during the honeymoon period are usually higher than a traditional loan, and redraw features are rarely attached.

If you’re in the market for your first home loan the best way to find it is to shop around and compare rates and features. Make it a goal to pay off as much as you can in the first few years so you won’t find it harder when your rate reverts back to the standard variable.

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