If you are looking at switching to a variable rate loan or refinancing to access a cheaper variable rate, then the following fact sheet should give you the basics on what you need to know.
How do variable rate loans work?
The interest rate on a variable home loan will usually go up and down in response to changes in the RBA official cash rate. Different lenders may also change their variable rates independent of any RBA cash rate movements.
What are the Pros and Cons?
Pros
- Your loan repayments will drop should interest rates drop
- You will have access to a wider range of home loan features that can save you time and money
Cons
- Your loan repayments will increase if interest rates rise
- Variable rates sometimes are increased independent of the RBA official cash rate
What are the current varibale rates?
Variable rates will often vary between lenders and will frequently fluctuate. To find out what the current interest rates are on variable rate home loans, ask your local mortgage broker. They can negotiate a cheaper rate on your behalf and even help you find a more personalised variable rate home loan package.
For more information on home finance in your best interest, simply complete a contact form and we will have a home finance broker in contact with you within two business hours. Alternatively, call us at any time on 13LOAN or for overseas callers +61 2 90188417.
