Variable Rate Home Loans

Standard Variable:
Standard variable loans are the most popular home loan in Australia. The standard variable rate loan comes with many options and the interest rate fluctuates depending on market conditions. You have flexibility of making additional repayments without penalty and the ability to redraw any additional repayments you have made at any time.

  • If interest rates fall, the size of your minimum repayments will too.
  • Standard variable loans allow you to make extra repayments. Even small extra payments can cut the length and cost of mortgage.

  • If interest rates rise, the size of your repayments will too.
  • Increased loan repayments due to rate rises could impact your household budget, so make sure you take potential interest rate hikes into account when working out how much money to borrow.
  • You need to be disciplined around the redraw facility on a standard variable loan. If you dip into it too often, it will take much linger and cost more to pay off the loan.
Basic Variable:
Many lenders offer a basic variable rate loan with a lower interest rate than the standard variable rate loan (usually around 0.7%). These loans generally have many of the same features as their standard variable rate cousins, but often aren’t as flexible. For example, some of these loans may not allow you to redraw additional payments or you may incur fees if you do so.

  • Low interest rate (lower than a standard variable loan) no frill loan
  • Rate is variable so it generally moves in line with Reserve Bank changes
  • Limited features (e.g. usually no access to offset facilities and more expensive redraw if at all)
  • Basic variable loans often don’t come with a redraw facility. Removing the temptation to spend money you’ve already paid off your loan.
  • You won’t be able to pay it off quicker or get access to money you already repaid if you ever need it.

Guarantor Loans
Fixed Rate Home Loans

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