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Variable Interest Rate Home Loans

Variable loans are ones where the interest rate varies with time. Variable loans can be repaid either interest only where the principal remains the same or principal and interest, where the outstanding balance reduces as the loan is repaid.

There are three types of variable loans:
  1. Standard Variable: This is your "normal " home loan with a variety of features depending on the lender. They tend to have a lot of options available such as credit cards, ability to make extra payments or withdrawals, B Pay, etc. A standard variable loan can be considered to be "fully optioned". Several lenders offer "Professional Packs" which provide significant interest rate discounts and lower or no application fees. These discounts usually apply for loans over a minimum size, e.g. $200,000.
  2. Basic Variable: Basically this a "no frills" version of the standard variable and tends to be at least 0.5 % cheaper. A good choice for those wanting to get rid of their mortgage as quickly as possible.
  3. Discount Variable: This is a variety of standard variable that has an introductory or "honeymoon" rate for an initial period of the loan. After this initial period the "honeymoon" rate reverts to the standard variable.