Variable Rate Home Loan

Variable Rate Home Loan

Standard variable loans are the most popular home loan type in Australia. The interest rate on this loan moves up and down, usually in line with official interest rate fluctuations. This means the interest rate may go up or down during the loan term. Different lenders offer different features and rates on their standard variable loan products, generally according to the amount you are borrowing.

Current Rates
Standard variable interest rates are actually not standard and different lenders have different 'standard' rates.  The one most commonly referred to in the press however is the standard variable rate of the major lenders. While the RBA may cut the official cash rate, this does not necessarily translate into a rate cut on your standard variable loans. The degree to which rate cuts are passed on varies among the different lenders. For individual lender comparison rates on current standard variable loan products, you will need to either talk to a mortgage broker, or research and compare the loans yourself.


Standard Variable Rate
Standard variable home loans usually offer lower interest rates than a fixed rate loan.  But, as the rate is variable, this means that your rate can go up if interest rates rise over the term of your loan.  If interest rates rise, your repayments go up also, meaning that you will be paying more each month to repay the loan.  

However, if rates are cut, your interest rate should come down also and your repayments will be lower.  If you have fixed your rate an interest rates fall significantly, you would not be able to reduce your rate and will be paying much higher rates than home owners who are on a variable rate.  Standard variables come with extra benefits such as early repayments, redraw facilities and fortnightly repayments.

Basic Variable Rate
This is the no frills type of home loan.  Usually offering the lowest rates of any home loan, the basic variable home loan come with less benefits than a standard home loan, so you may not be able to make early repayments without being charged a fee.  However, your interest rate is still subject to change, either up or down depending on what the market is doing.


Call and talk to a local Sydney mortgage broker and find out which type of home loan is best for you.  Call us on or submit your details on line.


 

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