Borrowers offered double honeymoon as they brace for interest rate pain
As Australians brace for another interest rate rise on Wednesday, the country’s first home loan that offers a five-year honeymoon period and then stays below the standard variable rate for life has been unveiled.
Distributed exclusively through X Inc Finance, the Five Year Double Honeymoon Home Loan has been designed specifically to cater for uncertain economic times, and is the first in Australia that guarantees to stay below the prevailing variable rate for the life of the loan.
Expected to be very attractive to professionals and first home buyers, it’s the first home loan in Australia that rewards loyalty by reducing the rate after the Honeymoon period.
The loan offers a range of benefits, including 30-year terms; ability to make additional repayments; split loan facility; and redraw at no cost.
For a $250,000 loan over 25 years, Five Year Double Honeymoon Home Loan borrowers can save more than $40,000 compared to borrowers with low-rate loans from other well-known lenders. (see table attached).
A better solution
The Reserve Bank of Australia meets tomorrow (7 November) to decide whether official interest rates should rise, following a 0.25pc increase in August on the back of a 0.25pc rise in May. Their decision will be announced on Wednesday.
X Inc Finance CEO Jennifer Nielsen said the new loan would appeal to people who were looking for a better solution.
“It is an intelligent choice because it looks at the long term”, Ms Nielsen said. “We know that many Australians are feeling particularly anxious about the possibility of yet another interest rate rise.
“That’s why we’re offering the Five Year Double Honeymoon Home Loan. This is a very special offering that aims to give the best possible value to borrowers over a long period of time.
Value, certainty, reassurance
“At a time when so many Australian families are concerned about the economy and interest rates, the Five Year Double Honeymoon home loan offers value, certainty and reassurance.”
The new loan is a Double Honeymoon:
It offers a variable rate of 7.0 per cent for five years for loans under $300,000, and 6.9 per cent over $300,000 up to $2.5 million. No other loan in Australia offers a five-year Honeymoon period.
At the end of the first Honeymoon, you receive a second Honeymoon when the rate drops another 0.1 per cent below the final rate.
“The value proposition is pretty impressive. There is nothing like it available anywhere else. You get a home loan at a lower rate with a very flexible offering”, Ms Nielsen said.
“For people borrowing large amounts of money, this product offers the sort of benefits – a low rate with all the trimmings – that you normally have to beg for.
No need to ever refinance
“We just give it to you. And it’s not a cheap package-deal honeymoon like most low-rate loans where you eventually end up wanting to refinance – which costs a fortune – because you end up with a flexible loan at a low rate.”
Ms Nielsen said the Five Year Double Honeymoon loan was superior to other low-rate loans which were only available over the internet or the phone.
“Not only is this loan actually cheaper, but you can talk to our brokers face to face, which is so important when you have so many questions racing through your head. It’s a difficult time when you really need someone to talk to about the issues on your mind. We know that, that’s why we don’t expect our clients to sign up on the internet or through some call centre operator in Mumbai.”
Loans are available from $30,000 to $2.5 million, with a maximum Loan Value Ratio (LVR) of up to 97 per cent for loans up to $500,000, ranging down to 80 per cent for loans of $2.5 million.
