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What is a variable rate home loan?
When you take out a home loan, along with repaying the loan amount, lenders will also charge you interest on the amount borrowed. The interest can be charged at either a fixed rate or a variable rate. With a variable rate home loan, the interest rate can rise and fall throughout the loan term. This means that your repayment amounts can change throughout the length of your loan, either increasing or decreasing.
Best variable rate home loan
Ultimately, the best home loan option will depend on your individual circumstances. However, key questions to ask when choosing a variable rate home loan include:
- What fees are included?
- What are the features and benefits?
- Given that interest rates can fluctuate, can I afford future increases?
- Is there repayment flexibility? Can I pay off the loan early?
Mortgage brokers you can trust
Mortgage brokers at Oceania Finance know it can be a confusing and stressful process when choosing a home loan. That’s why our team of friendly experts are committed to working closely with our clients so we can offer the most tailored solution for your needs.
Whether you’re a first time home buyer, investor, or looking to refinance your home loan, our team is ready and waiting to help!
Contact us for more information.
Variable Rate Home Loan Frequently Asked Questions
If you haven’t used a finance broker before, you probably have some questions. Let’s help you get some answers.
What is the current variable home loan rate in Australia?
Each lender will offer their own variable interest rates based on their policies, market conditions, and your individual circumstances. It is possible to gauge an average by checking comparison websites, but it’s best to consult lenders or a mortgage broker directly.
A mortgage broker, like our team at Oceania Finance, can negotiate home loan interest rates on your behalf and ensure you get the best terms for you. Contact us today to get your home loan journey started!
How high will variable rates go in Australia?
There is no limit for variable interest rates in Australia. Generally, variable interest rates will often be raised or lowered depending on the cash rate set by the RBA (Reserve Bank of Australia).
If you’re concerned about getting the best deal on your home loan interest rate, contact our experienced mortgage brokers today. With access to a wide range of lenders, our dedicated team will work to find the right home loan solution for you.
How often do variable rates change?
As interest rates are affected by multiple factors, both general and individual, they can be difficult to predict. Typically, interest rates can change multiple times a year, and can either be raised or lowered. While they are predominantly affected by the cash rate set by the Reserve Bank of Australia (RBA), they are also affected by:
- Your individual circumstances
- The size of your mortgage
- Your credit score
- The loan-to-value ratio
Can you pay off a variable rate mortgage early?
Generally, most variable home loans offer payment flexibility allowing you to pay off the loan early without penalties, fees or caps.
Can you change from fixed to variable?
It is possible to change from a fixed rate home loan to a variable rate home loan. However, changing from fixed to variable could end up costing you more money through break costs. It’s important to speak with your lender or mortgage broker directly to work out which option will benefit you in the long run.
If you’re considering making the change, contact our mortgage brokers at Oceania Finance. Our team of experts can handle all the details to make sure the process is as stress free as possible.