Introductory Rate Loan Calculator
What happens to your repayments after the honeymoon rate ends?
Introductory rates look attractive but it is what comes after that matters most. Use this calculator to see the full picture before you commit.
How does it work?
Some home loans come with an introductory or honeymoon rate, a lower interest rate for an initial period (typically 6 to 24 months) that then reverts to a standard variable rate. The introductory rate reduces your repayments during that period, but once it reverts you may find yourself on a rate that is higher than what you would have got with a standard loan from the start. This calculator shows you your repayments during the intro period, what they will become after the revert, and the total cost compared to a standard loan.
The calculator has been provided in good faith as a guidance tool only. Results are not financial advice, are a guide only, and are not a guaranteed outcome or quote. Borrowers should always discuss their individual situation with an Australian Credit Licensee or authorised Credit Representative.
What to look at beyond the introductory rate?
The revert rate
The rate your loan reverts to after the introductory period is the most important figure. A very low intro rate followed by a high revert rate can leave you worse off than a standard loan with a competitive rate from the start.
The length of the intro period
The longer the introductory period, the more time you have at the lower rate. But also the more time before you know what rates will look like when you revert.
Whether you can refinance after the intro period
Many borrowers take an introductory rate loan with the intention of refinancing before the revert kicks in. This is a valid strategy but involves switching costs and assumes you will still qualify for a competitive loan at that point.
Fees and conditions
Some introductory rate loans have conditions that restrict extra repayments or charge fees for breaking out of the loan before the intro period ends. Check the full terms carefully.
How to approach introductory rate loans sensibly
• Always compare the revert rate and the comparison rate, not just the introductory rate.
• Use this calculator to work out the total cost over the full loan term, not just the intro period.
• If you plan to refinance before the revert, factor in switching costs and make sure the timing is realistic.
• Do not let a low introductory rate distract you from loan features that matter, like an offset account or flexible repayments.
Introductory rate questions we get asked a lot
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It depends on the revert rate, the loan features, and your plans. Sometimes they represent genuine value. Other times the headline rate masks a high revert rate that makes the loan expensive over the long term. Always look at the comparison rate and total cost, not just the introductory rate.
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A comparison rate is a standardised figure that includes both the interest rate and most fees, expressed as a single annual percentage. It is designed to give you a more accurate picture of the true cost of a loan than the headline interest rate alone. By law, Australian lenders must display a comparison rate alongside their advertised rate.
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It depends on the loan. Some introductory rate loans restrict extra repayments during the intro period. Check the terms before assuming you can make extra payments.
Not sure whether an introductory rate loan stacks up?
We will help you compare the real cost across all your options, not just the headline rates.