Introductory Home Loans
Honeymoon Home Loans To Get Your Foot In The Door
An introductory or honeymoon home loan offers a discounted rate for the first six months to two years, before reverting to the lender’s standard rate. The early savings help, but the borrowers who come out ahead are the ones who plan for the revert rate from day one.
As an independent Melbourne mortgage broker, we compare introductory offers across our lender panel, and the revert rate too, so a low starting rate doesn’t become an expensive loan once the honeymoon ends.
What is an Introductory (Honeymoon) Home Loan?
An introductory home loan, or honeymoon loan, is a home loan that charges a reduced rate for a set period, usually six months to two years, then reverts to the lender’s standard rate. The discount can be a full percentage point or more, lowering early repayments. When the period ends, the loan switches to the revert rate, typically the lender’s standard variable rate and usually higher, so repayments rise. Most honeymoon loans are variable, some fixed. The discount matters far less than the rate you land on afterwards.
Why Consider an Introductory Loan?
Lower repayments when they help most
Smaller early repayments ease the shift into a mortgage, useful when you’re furnishing a first home or absorbing the costs of moving in.
Room to get ahead early
Keep repaying as if you were on the standard rate and put the difference toward your principal. Paying down more while the rate is low shrinks the balance the revert rate applies to, if the loan allows extra repayments.
A planned entry point
Some borrowers take the low rate, then refinance when it ends. With the exit costs understood upfront, it can work; without a plan, it’s how borrowers get stranded on an uncompetitive revert rate.
Do you qualify for an Introductory Loan?
Introductory loans use standard home loan criteria; the honeymoon rate is a pricing feature, not a separate product. Here’s what lenders generally look for:
Your profile
- Stable income sufficient to service the loan at the revert rate, not just the introductory rate, which is how lenders assess serviceability
- Clean credit history and a record of meeting financial commitments
- Deposit of 10–20%; lenders’ mortgage insurance (LMI) generally applies below 20%
- Usually owner-occupier products, often marketed to first home buyers
The property
- Standard residential property: house, unit, townhouse, or apartment
- Satisfactory lender valuation supporting the purchase price
- Owner-occupied in most cases, though some lenders extend offers to investment loans
The loan
- Introductory period typically 6 months to 2 years
- Discounted rate, then reversion to the standard variable (or higher fixed) rate
- Watch for ongoing fees, and switching or exit fees if you refinance later
- Features can be lighter; offset accounts and unrestricted redraw aren’t always included
How Orange Home Loans Helps You
With a honeymoon loan, the number that wins you over is temporary, and the one you live with is hidden further down the page. Our job is to compare the whole loan, not the headline. Here’s why borrowers choose Orange Home Loans.
We compare the revert rate, not just the discount
A sharp introductory rate on an uncompetitive standard rate can cost more over time than a plainer loan with a better ongoing rate. We compare both numbers across our panel.
Independent advice on whether it fits
We work for you, not the banks. Sometimes a honeymoon loan is the right call; often a low-rate variable loan, or one with an offset, serves you better. We’ll model the difference before you commit.
Local Melbourne expertise
Based in Moonee Ponds and serving homeowners across Greater Melbourne, we offer face-to-face appointments and review your loan as the introductory period nears its end, so you act on time rather than drifting onto the revert rate.
SMSF loans:
Frequently asked questions.
Introductory Home loans:
Frequently asked questions.
What is a honeymoon rate on a home loan?
A honeymoon rate, or introductory rate, is a discounted interest rate for the first part of a loan, usually six months to two years. After that, the loan reverts to the lender’s standard, typically higher, rate. The discount lowers early repayments, but the ongoing rate determines the loan’s real long-term cost.
How long does the introductory period last?
Most run six months to two years, with one year common. Longer honeymoon terms exist but are rare. Either way, the length matters less than how competitive the revert rate is once it ends.
What is a revert rate?
The revert rate is the rate your loan switches to when the introductory period ends, usually the lender’s standard variable rate. It’s often noticeably higher than the honeymoon rate. Because it applies for most of your loan term, it deserves more attention than the discount.
Are honeymoon loans a good idea?
They can be, with a plan. Many introductory products carry uncompetitive standard rates, so early savings can be outweighed by higher costs later. A honeymoon loan works best if you use the low-rate period to pay down extra, or intend to refinance when it ends and understand the exit costs. If you’d simply drift onto the revert rate, a better ongoing rate elsewhere usually wins.
What happens when the honeymoon period ends?
The loan moves to the revert rate, and repayments rise. You can stay put, switch to another product with the same lender, or refinance elsewhere. Planning this transition before it arrives is the most important part of taking a honeymoon loan, and something we flag ahead of time.
Can I refinance after the introductory period?
Yes, and many do to escape a high revert rate. Check for switching or exit fees, and if the introductory rate was fixed, possible break costs. Most honeymoon loans are variable, where a break fee generally can’t apply, but application and discharge fees still count. We weigh those against the savings first.
Do introductory loans have fewer features?
Sometimes. To fund the discount, some come with restricted redraw, limited extra repayments, or no offset account. If getting ahead on repayments or keeping an offset is part of your plan, that trade-off matters. We check the features against how you’ll actually use the loan.
Are honeymoon loans only for first home buyers?
They were designed with first home buyers in mind and are still marketed to them, but they’re now available more broadly, mostly to owner-occupiers. The same rule applies to everyone: judge the loan on its revert rate and features, not the honeymoon.
Does Orange Home Loans help with introductory loans in Melbourne?
Yes. We’re a Melbourne-based independent mortgage brokerage helping first home buyers and owner-occupiers compare introductory, variable, and fixed home loans across Victoria.