Variable Rate Home Loans

Making your Loan work for you
If you value flexibility in your home loan, a variable rate loan could be a great option for you. With a variable rate, your interest rate fluctuates in response to changes in the Reserve Bank of Australia’s (RBA) official interest rate. Variable rates are often preferred because they offer more flexibility, such as the ability to make additional repayments without penalties, access to offset accounts and redraw facilities, and no early termination fees or break costs. If the RBA lowers the official interest rate, your rate typically decreases as well. However, if the RBA increases rates, your interest rate and repayments may rise.
Many homeowners today are choosing to split their home loans—keeping a portion at a fixed rate while leaving the remainder variable. This strategy gives you the certainty of fixed repayments on part of the loan while retaining the flexibility of the variable portion. For example, you might fix 80% of your mortgage balance and keep the remaining 20% variable. This approach allows you to enjoy fixed-rate security on a larger portion of your loan, while still benefiting from features like offset accounts, redraw facilities, and unlimited extra repayments on the variable portion. You can decide on the split that suits you, such as 50/50% or 90/10%. Keep in mind that your lender may have minimum amounts or percentages for a loan split. Before making a decision, it's important to consider the potential costs of splitting your loan and how it may affect you long-term. Ready to explore your options? Please get in touch using the form below.

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Key Benefits Of Variable Rate Home Loans

01.
Lower your interest payable with an offset account
An offset account works by linking your savings or income account to your loan. The balance in this account is deducted from your loan balance when calculating interest, helping reduce the interest you pay and lowering your overall repayments.
02.
Access to Redraw Facilities on extra repayments made
Redrawing any extra repayments you’ve made allows you to reduce the interest on your loan while those additional payments are held against your loan balance. When needed, you can access this money again through the redraw facility.
03.
Addtional repayments with no penalty
Most lenders allow you to make extra repayments on your loan without penalties or fees. This gives you the flexibility to pay off your loan faster, saving you interest without being charged for making extra contributions.
04.
Decrease in interest rates lowers your repayments
When the RBA lowers the official interest rate, your lender is likely to follow suit, reducing your interest rate. This will, in turn, lower your future repayments and save you money over time.

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