- Introductory loan. Borrowers may not be consciously aware that they are ‘locked in’ to these types of loans for X number of years where loans are converted to the standard variable rate when the honeymoon period ends, whereby they end up paying the standard variable rate for 3 years after the honeymoon period.
- Discounted ‘No Frills’ Loan No frills loan products are often lower than the standard variable loan by up to 0.51%. It might not look as ‘cheap’ as the Introductory Loans but this discounted rate is available for the life of the loan term and not just the first 12 months. It might not offer all the same facilities as the standard variable loan where you may have an offset account, credit cards, or a reduced redraw fee but if you don’t use those facilities why pay more for things you don’t need?
- Loan Packaging. Loan packaging offers by some of the larger banks also provide a discounted rate to borrowers who meet the qualifying criteria set by the individual banks. There are usually a minimum loan size and a minimum income requirement to qualify for a loan package. The discount on offer is usually on a sliding scale, whereby the larger the loan size the larger the discount rate. You will not have to pay an application fee but there is an annual loan package fee.
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