Variable Rate Home Loan

Homeowners who want more options and flexibility from their home loan can benefit from a variable rate home loan. Unlike a fixed rate home loan, a variable rate home loan features an interest rate that increases and decreases according to the official cash rate. A variable rate home loan is usually one that will have you paying both principal and interest, although you can get an interest only variable rate home loan. A basic variable rate home loan has the lowest interest rate but limited options. A standard variable rate home loan, on the other hand, has a slightly higher interest rate than a basic variable rate home loan, but this will offer you with more flexibility.

A variable rate home loan will usually allow you to make additional repayments without penalty. Aside from that, this can be portable and you can even turn it into a split loan. A variable rate home loan also features a redraw facility and may offer you with a line of credit facility or rental or dividend income. You can even take advantage of decreases in the interest rate to pay off your loan faster.

For Whom Is A Variable Rate Home Loan Suitable?

A variable rate home loan is suitable for those who wish to make additional repayments on their home loan without having to pay penalty. This is good for those who have great budgeting skills as well as financial discipline.

Why Should I Get A Variable Rate Home Loan?

If you know how to plan for increases in interest rates, and you would like to make extra repayments in order to pay off your home loan faster, then a variable rate home loan may be just right for you. A variable rate home loan even includes extra features and some loan products even have honeymoon rates that you can take advantage of.