Variable home loans are very common loans offered by lenders and bankers. Most first time home buyers take this loan. This type of loan start with a lower interest rate and after a fixed time, the rate fluctuates according to the market index, as set by the Reserve Bank. It means the interest rates move up or down with the market. The basic variable loans in general have fewer loan features than the general loans. Generally, repayment term is upto thirty years. The features and rates offered by different lenders depend on the amount you are borrowing, your credit score and some other factors.
Pros and cons of variable interest rate loan
Some of the advantages of variable interest rate home loans are:
• Flexibility: It has some flexible features, like having options of making additional payments, low introductory interest rates or redrawing facility.
• Option of lower repayment: As the interest rate varies with that of the market index, if the rate falls, the amount of repayment also becomes lower.
• Faster paying off the loan: This type of loan also has the option of paying extra as advance towards the loan. Thus, every month, if you pay an extra amount in addition to your minimum payment amount, you can repay the loan faster.
• Helps in budgeting: As this loan gives you the option of weekly, fortnightly or monthly repayment, you can maintain your budget accordingly.
• Option of redrawing: This type of loan gives option of redrawing the additional amount you have made towards the repayment, in addition to the minimum repayment amount.
Some of the disadvantages of variable interest rate home loans are:
• Repayment may become more: If the interest rate rises, the amount of monthly repayment also becomes more and it may become more than the amount you can afford.
• Interest rate generally rises: Generally, the interest rate rises than it was in the initial period, when the loan was taken.
• Fewer features: It offers fewer features than the general loans.
Prior to opting for variable home loans, you should weigh the pros and cons of it mentioned above and find out whether or not this type suits you the best
Compare Variable Rate Home Loans >>
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Mortgage |
Interest Rate $250k (pa) |
Comparison Rate (pa) |
Features |
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Dream Catcher |
6.13% |
6.47% |
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UHomeLoan - Refinance only (6.14%p.a incl 0.20%p.a lifetime Loyalty Discount) |
6.14% |
6.14% |
The Best Refinance Rate in the Australia.
Enjoy a low 6.14% p.a. (6.14% p.a. includes ... |
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State Custodians Standard Variable Offset Loan |
6.22% |
6.45% |
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First Homebuyers Loan Package |
6.39% |
6.69% |
We help home buyers who qualify for the First Home Owners Grant to buy their first pro ... |
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Renovators Loan Package |
6.39% |
6.69% |
We help home owners who are looking to substantially renovate their existing dwelling ... |
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Construction Loan Package |
6.39% |
6.69% |
We help home buyers who are looking to build a new dwelling or buy one off the plan wi ... |
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Premium Plus Package Home loan |
6.39% |
6.70% |
Comes with a range of flexible repayment options, a 100% Mortgage Offset Account, acce ... |
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goGreen Home Loan |
6.48% |
6.53% |
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Liberty Star Home Loan |
6.49% |
6.79% |
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Professional Package Variable |
6.53% |
6.79% |
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Mortgage Simplifier |
6.62% |
6.62% |
For a limited time, Mortgage Simplifier will have an interest rate discount of 0.16% p ... |
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Variable SmartFit |
6.64% |
6.82% |
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Mortgage |
3yr Fixed
$250k (pa) |
5yr Fixed
$250k (pa) |
Features |
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Fixed Loan |
5.95% |
6.39% |
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UHomeLoan for refinancing - Fixed Rate Loan |
5.98% |
6.84% |
• Competitive interest rates / Loyalty Discount
• Online or over the phone application ... |
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Fixed Rate Loan |
5.99% |
6.69% |
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Fixed Rate Loan |
5.99% |
6.49% |
Loan reverts to Mortgage Simplifier at the end of the fixed rate term. |
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Fixed Rate Home Loan |
6.14% |
6.64% |
2009 AFR Smart Investor Blue Ribbon Award Winner |
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Fixed Loan |
6.14% |
6.95% |
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Standard Fixed Rate |
6.24% |
6.84% |
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Fixed Portfolio Loan |
6.24% |
6.84% |
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State Custodians Standard Fixed Home Loan |
6.26% |
6.61% |
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ANZ Fixed Loan |
6.29% |
6.79% |
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Fixed Rate Home Loan |
6.29% |
6.99% |
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Fixed Home Loan |
6.39% |
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Compare more home loans >>
Home Loan Comparison interest rates in this table are based on a loan amount of $150,000 and a term of 25 years.