Introductory home loan

It is a loan with a discounted interest rate for an initial period, sometimes called a honeymoon loan. When that period ends the loan reverts to the lender's ongoing rate for the product. The revert rate is the one that applies for the remaining years of the loan.

It is set by the lender and stated in the offer, and it is short relative to the life of a mortgage. The important number is not how long the discount runs but what the rate becomes afterwards. Check the revert rate in the offer document before you compare anything else.

It can be, where the revert rate is competitive and the discount genuinely helps your first year. It is a poor deal where a large discount hides an uncompetitive ongoing rate. Costing the loan over the full term rather than the introductory period is what separates the two.

The loan moves to the lender's ongoing rate for that product, usually without you doing anything. At that point you can renegotiate with the lender, refinance elsewhere or stay. We diarise the date so it becomes a decision rather than something that happens to you.

Generally yes, subject to lender approval and your circumstances at the time. Some introductory products charge a fee if you leave during the discounted period, so check the offer before you plan around an early exit. A refinance also has its own costs, which we model before recommending one.

Some products limit extra repayments, exclude an offset account or restrict redraw while the discount applies. The restrictions vary by lender and by product. We go through them before the application goes in, because they matter most to the borrowers a discount attracts.