Variable Interest Home Loans

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Looking for the best variable rates in Australia? At Rateseeker, we can find and negotiate the best interest rates to suit your financial goals.

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What is a Variable Interest Home Loan

Variable rate home loans are home loans with interest rates that can change throughout the loan’s lifetime. Fluctuations of your interest rate can occur depending on the market and changes made to the official cash rate set by the Reserve Bank of Australia (RBA). This means that when your interest rate rises and falls, so does your mortgage repayments. 

→ Comparing home loans? Use our calculators to compare products across 30+ lenders

Identifying Features of a Variable Interest Home Loan

If you’re looking for a more flexible home loan or a loan product with more features, then a variable interest loan might be for you. While parts can vary between lenders, they generally include the following: 

Offset account

Most variable home loans will have an offset account, like a savings or transaction bank account linked to your mortgage. Like any bank account, it allows borrowers to reduce their payable interest rate over time. Money paid into your offset account is included when you or your lender calculate the interest owing on your home loan. 

Extra repayments

This type of loan allows you to make additional repayments on top of your monthly repayments with no charge. This can enable you to get ahead of schedule and get you closer to paying off the mortgage faster while reducing the total interest repayments you make. 

Redraw facility

Redraw facilities can allow borrowers to withdraw any additional home loan repayments you’ve made, enabling you to reduce your interest charges, knowing that you can access extra funds if you need to. 

Different packages

While shopping for your loan product, some will package variable interest home loans with other financial products like a line of credit or credit card. Therefore, a package could save you money, as you typically will be charged a single loan account fee to cover all products within the package. 

→ Learn more: How to obtain a home loan as a first time buyer

Variable rate mortgage vs. Fixed rate mortgage

Unlike fixed rate home loans, variable home loan rates offer more flexibility than fixed rate loans. On the other hand, fixed rate loans will have a set interest rate for a period, which reverts to the standard variable rate after one to five years. 

Depending on your financial situation and loan goals, a variable interest home loan can give you the following benefits: 

  • Potential to save money when interest rates from
  • Greater flexibility on the repayment terms and features
  • Ability to refinance to a different loan product or lender

*That being said, this type of loan has less predictability in budgeting your repayments or leads to increased repayments if interest rates rise.

→ Unsure about a loan product? Head on over to our FAQs for more information

Why Choose Rateseeker to find the best variable rate mortgage?

Always on hand and ready to help at all times, believe us when we say our mortgage brokers practice what we preach 100%. 

Whether you’re a long-term investor or a first-time buyer, our mortgage brokers will find a variable rate home loan product that best meets your requirements and has features that best align with your lifestyle. Our specialists offer competitive rates, transparent customer service and strong support from start to finish, but we go beyond being a mediator between you and your lender. We like to consider ourselves as financial advisors, not just mortgage brokers working with you one-on-one to help you obtain a clearer picture of how to build your credit score. We ask the right questions, learning everything about your lifestyle and your loan goals, so we find the right loan product the first time around. Rateseeker provides: 

  • Accessible, prompt service
  • A reliable support team of licenced mortgage brokers
  • Collective experience of more than 20+ years
  • Communicate with you via phone, email, online chat, so you have access to us at all times
  • Clear, concise and transparent communication

Our team is also always available to help you out. If you’re ready to work with us, don’t hesitate to reach out today.

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We negotiate lower home loan rates from 30+ lenders

Rateseeker has access to all of Australia’s major banks, and over 30 third-party lenders. We provide tailored home loans and interest rates that suit your unique situation.

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FAQs about Variable Interest Home Loans

What is a variable interest home loan?

Variable interest home loans are specific types of loans with an interest rate that can change over time. With a home loan with variable home loan rates, you can take advantage of any interest rate decreases throughout the term of your loan. If your rate decreases, it means you get to pay less interest on your loan balance.
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Should you go with variable or fixed interest home loans?

When it comes to deciphering whether a fixed interest home loan or a variable rate mortgage is better for you, it comes down to preference, your current financial situation and what you want to get out of the home loan. Understanding the differences between variable and fixed interest rates can help you meet your financial goals. Some benefits of a variable interest home loan include:
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What is the current variable interest rate for home loans?

According to Finder.com, the current variable interest rate for variable rate mortgages in Australia is 3.93% as of 2021.
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Do variable rate home loans have a max interest rate?

Most variable interest home loans don’t have a maximum interest rate (some going up to 25%). Luckily, most lenders will often cap their interest rates. An interest rate cap limits how high your interest rate can rise on a variable rate mortgage. Caps are structured to help limit incremental increases in the rate of a loan. An interest rate cap helps benefit borrowers in a rising interest rate environment, making the product more financially viable and attractive for customers. Interest rate caps also give customers protection against dramatic rate increases, providing a threshold for maximum interest rate costs. The maximum interest rate of a variable home loan depends on how your lender customises and structures the interest rate cap.
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Does my home loan interest rate change automatically if variable?

Not necessarily. Variable home loan rates can increase or decrease depending on the actions of the market. As a result, variable rates may not always be higher than fixed rates. You will often find that the average variable rate is lower than an average fixed rate.
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Why choose Rateseker for variable interest home loans?

With the best tools of the trade and years of industry experience, Rateseeker exists to empower Aussies to find the right home loan and educate them along the way. Whether you need a fixed rate home loan or looking to compare variable interest rates, our experts ensure that you have access to the correct information and tools to help you compare the best products in the market. Combined with our easy to navigate platform, we aim to provide you with a clearer picture of your current financial state and get closer to that dream home.
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Meet one of our experts

Director Nick Chong

As a founder of Ardent Capital Group, Nick Chong brings more than 12 years of financial planning and mortgage broking experience. This, together with his strong economics background, gives him the expertise to lead his handpicked talented team of advisers.

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