This is a competitive market and lenders have responded by offering inducements to borrowers. In particular, it has become standard practice for many lenders to offer an introductory rate or honeymoon rate, for the first year of borrowing. This is a reduced rate on the standard variable home loan rate of interest.

At the same time, most lenders  incorporated penalties for early termination of the loan so as to deter borrowers from changing lenders at the expiration of the introductory rate and borrowing from another lender with an introductory rate. These early termination penalties usually applied should the loan be fully repaid in the first three to five years.  As previously mentioned, new laws prevent many types of such exit fees on loans, making this option more attractive, as it is now easier to exit introductory loans at the end of the introductory period.