What is introductory rate?
An introductory or 'honeymoon' rate is a discounted variable rate offered for a limited period (typically 12 months) at the start of a loan — after which the rate reverts to the lender's standard variable rate plus any package discount.
An introductory rate (sometimes called a honeymoon rate) is a sharp variable rate offered for a fixed initial period — usually 12 months — at the start of a new home loan. The rate is typically 0.30-0.80% below the lender's normal discounted variable rate during the intro period, then reverts to standard pricing.
Intro rates are most common with neo-banks and online-direct lenders chasing customer acquisition. The marketing math is straightforward: a 0.50% rate discount on a $500,000 loan saves the borrower $2,500 in the first year, while costing the lender similar customer-acquisition cost they'd otherwise spend on advertising.
Trade-offs: read the post-honeymoon revert rate carefully. Some intro products revert to an above-market SVR with weak discount, erasing the first-year saving over years 2-5. Treat the published comparison rate (which includes the revert assumption) as the more meaningful number.
honeymoon rate · introductory rate · intro discount
- Variable-rate home loan — A variable-rate loan moves with the lender's pricing decisions and the RBA cash rate cycle — the rate (and your repaymen…
- Comparison rate — Comparison rate is a statutory percentage that folds standard upfront and ongoing fees into the headline rate on a $150,…
- Standard variable rate (SVR) — The standard variable rate is each lender's reference variable interest rate — the public benchmark off which package di…
General information only — not personal financial advice. Verified against https://ratesniffers.com.au/glossary on 2026-06-01.