Blog How to take advantage of a special rate loan

How to take advantage of a special rate loan

24 August 2020

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We’ve recently launched our Smart Booster Home Loan, Australia’s first-ever variable owner occupied home loan with a rate under 2.00% p.a.

The Smart Booster Home Loan has a 1.99% p.a. introductory variable rate (2.47% p.a. comparison rate) for one year before reverting to a rate of 2.48% p.a. In addition to this, we’re also offering a two year discounted variable rate of 2.09% p.a. (2.71% comparison rate). Sporting some of the most competitive interest rates on the market, both loans are available to borrowers with a Loan to Value Ratio (LVR) of up to 80% and have a maximum loan amount of $1,000,000.

So what’s the best way to take advantage of a special rate loan like these?

How to take advantage of a special rate loan

A special rate or introductory home loan is a loan that will have a discounted rate for a period of time, typically one to two years. After this time the rate will revert to a higher rate. Here’s how to best take advantage of a special rate loan:

Pay more than the minimum

In the introductory period of your special rate loan, your minimum monthly repayments will be lower than when the period ends and your interest rate goes up. For this reason, special rate loans are also referred to as honeymoon rates as they’re popular amongst first-home buyers who want lower repayments so they can ease into life with a mortgage.

However, paying more than the minimum can be a great way to take advantage of your special rate loan. Paying more than the minimum will reduce the length of your loan and in turn reduce the amount of interest paid over the life of the loan. So while you’re paying more now, you could be saving thousands in the long run. Additionally, you can be flexible with how much extra you wish to pay each month.

Build equity

Special rate home loans typically have lower interest rates than standard variable rates. As a result, you may be able to pay more than the minimum monthly repayment for long after the special period has ended. By doing so you’ll be building up equity in your home quicker than you would with a normal home loan which you could use to purchase another home or refinance to a lower rate.

Pay less interest

Our special rate loan is one of the most competitive interest rates on the market. An interest rate as low as this means you’ll pay less interest on your loan, potentially saving you thousands of dollars. Even just five basis points can make a big difference to the interest you pay so make sure to check if your current rate is competitive.

Pay off your loan sooner

With the low rate of a special rate loan, it’s possible you could pay off your loan much quicker than you would a normal home loan, especially if you make extra repayments or pay more than the minimum repayment. Paying off your loan sooner means you’ll pay less interest and build equity quicker.

Benefits of the Smart Booster Home Loan

The Smart Booster Home Loan has numerous other benefits in addition to having one of the most competitive owner occupied rates on the market. You can make unlimited additional repayments, which can help you pay down your loan quicker, build equity, and pay less interest. You can also make unlimited free withdrawals, so if you want to access any of the access you’ve built up you easily can. Multiple loan splits are also available, so you could fix part of your loan and lock in a great rate.

The Smart Booster Home Loan also offers flexible repayment arrangements through weekly, fortnightly or monthly repayments, as well as the option to pay your bills with BPAY and set up a direct debit.

If you’re looking for a home loan under 2% with all these great features, apply now.

Apply now