Low Rate Variable Home Loans
Low rate variable home loans are home loans with variable interest rates that are lower than the average interest rate. According to Finder, the lowest variable home loan rate available in March 2023 is 4.74% 1. It is recommended to compare different low-rate home loans to save money on your mortgage 1. Variable rate home loans typically have lower interest rates and may come with features like offset accounts 12.
A variable home loan is a type of home loan with an interest rate that is not fixed, but adjusted periodically to reflect changes in a benchmark or reference rate, such as the official cash rate set by the Reserve Bank of Australia (RBA) . The interest rate can be variable for the entire term of the loan or combined with a fixed rate for part of the loan . The interest rate is usually above the reference rate . The mortgage repayments will change according to the interest rate movements . Variable home loans can offer flexibility and extra features to save money .
There are several benefits to choosing a variable rate home loan 1:
- You can probably make extra repayments. Home loans with variable interest rates usually allow you to make extra or additional repayments without a penalty. This gives you the flexibility to use extra income, a tax refund, a bonus or your savings to pay off your home loan sooner.
- You may be entitled to an offset or redraw facility. Home loans with variable interest rates may also offer an offset account or redraw facility. These features can help you reduce the amount of interest you pay on your home loan by using your savings to offset the balance of your loan.
- You may be able to take advantage of interest rate drops. If interest rates fall, your repayments will decrease, which means you could save money on your home loan.