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What is a honeymoon period?


RateCity Staff

RateCity Staff


There are many financial products that include a honeymoon period, which are suppose to help alleviate the burden of a loan for a short initial period of time. An introductory low interest rate on a mortgage is termed a honeymoon period because it is set at a lower interest rate then reverts to a higher rate when the intro period is over. In the long term, this can cost a lot more money wasted on fees or interest, compared to other basic home loans that have a lower interest rate throughout the loan term or even variable rate loans and fixed rate home loans.

The first year of a loan is usually the hardest because particularly for first home buyers, furniture and other costly expenses are needed. A loan with a honeymoon period is targeted at these types of buyers as well as those who stretch their budgets look to a honeymoon period as a haven for a short-term break. However, a honeymoon period is not always the best option when choosing a home loan that will save you money so make sure you compare home loans online to find the best loan to suit your needs.

To compare a large range of competitive Australian home loans visit our online comparison page and work out your finances with the home loan repayment calculator. For all the latest home loan related tips and information read our news articles and home loan guides

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