FAI Attacks Honeymoon Rates
FAI Home Loans Managing Director Mr Mike Halloran has continued his attack on honeymoon type home loans saying he deplored the current trend of banks and some mortgage managers to cash in on the gullibility of unwary home buyers.
Mr Halloran states, “the reality is that home buyers are being misled into thinking they are getting a good deal when this is often far from the case. When the one year honeymoon is over their wallets will be in for a rude shock”.
We believe that there is a place in the market for honey moon type loans as the discounted first year rate suits the cash flow requirements of a first home buyers and the flexibility and features of the standard product it reverts to also suits a number of borrowers.
However Mr Halloran’s comments are worth noting and potential borrowers should do their homework on the overall cost of the loan and then weigh up the advantages of this type of loan versus a basic type before making a decision.
FAI also announced cuts to its fixed rate products. The two year Borrowers Choice Value rate will be reduced by 0.5% from 6.95% to 6.45% ; with the three year rate to drop by 0.34% from 6.99% to 6.65% and the five year rate to drop by 0.3% from 7.15% to 6.85%.