> Introductory Rate Home Loan (IRHL) | Better Choice

Introductory Rate Home Loan (IRHL)

June 23, 2015

The Introductory Rate Home Loan starts with a low interest rate (often the lowest on the market) and is suitable if you want lower, fixed repayments during the first 12 months of the loan to make things easier. At the end of the initial 12 month term, the loan converts to the standard variable interest rate or the option of a fixed interest rate.

The advantage of an Introductory Rate Home Loan is that it offers borrowers a chance to reduce the principal quickly by making extra repayments. The main disadvantage is that most banks charge penalties if you payout these loans within the first three to four years.

Another disadvantage of this loan type is that generally, after the first 12 months on the considerably reduced rate, the variable interest rate would revert to the lenders standard variable rate. The standard variable rate can be up to 1.45% more expensive than the lender’s basic or professional variable rate. 

Certain lenders will pass on professional package discounts (variable rates) after the 1st year.

Ask a Better Choice Broker to do the figures as to whether this loan suits you.

This loan is also available as a home loan.


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