July 6, 2022 • 3:05 am

Azzam Derbas

Honeymoon rates could bite recent first home buyers

First home buyers that chose low introductory rates will feel the pressure of rate rises.

Many first home buyers were enticed to enter the market because of the increased government grant, with many choosing honeymoon rates that were as low as 4.5 per cent.

When borrowers’ honeymoon period ends their variable rates could jump by up to 1.5 per cent. In the same period the Reserve Bank may have increased rates by 1.0 per cent or more.

“A lot of lenders use the honeymoon rates to attract business but borrowers need to… understand what the repayments look like after the honeymoon is over.

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