Variable Rate Home Loans
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A Variable-Rate Home Loan is the most flexible and feature-rich way to finance property in Australia. The interest rate can fluctuate, moving up or down based on market changes like the RBA’s official cash rate.
While this means minimum monthly repayments can change, it allows you to access powerful features such as Offset Accounts and Redraw Facilities. If you prioritize making unlimited extra repayments without penalty to pay off your debt faster, a variable rate is the ideal solution. Lionskey Finance compares products from over 30 lenders to secure the variable rate and features that best support your accelerated repayment strategy.
Did You Know?
A key feature of many Australian variable-rate home loans is the Offset Account
An offset account is linked to your home loan, reducing the principal on which interest is calculated. For example, with a $350,000 loan and $25,000 in your offset account, you only pay interest on $325,000. Unlike standard savings, the interest saved is tax-free, making it a smart way to save.
Why is Lionskey Finance the best at Variable Rate Home Loans?
- Feature-Rich Comparison
- Unlimited Repayment Strategy
- Simplest Exit Strategy
- Negotiation for a Sharper Rate
- Guidance on Split Loans
What is a Variable-Rate Home Loan and what's the risk?
A Variable-Rate Home Loan has an interest rate that can increase or decrease over the loan term, based on market changes like the RBA cash rate. The risk is that if rates rise, your minimum repayments will also increase, making budgeting harder.
What key features come with a Variable Home Loan?
Variable loans offer powerful features like the ability to make unlimited extra repayments without penalty, a Redraw Facility (accessing extra payments you’ve made), and a 100% Offset Account.
How does an Offset Account save me money?
An Offset Account links a transaction account to your loan. The balance in the account is subtracted from your loan principal for interest calculation. You only pay interest on the difference, significantly reducing the total interest charged and helping you pay off the loan faster.
Can I switch from a Variable Rate to a Fixed Rate?
Yes, it’s generally easy and cheap to switch all or part of a variable loan to a fixed rate, as you typically won’t incur break costs. This is a key advantage if you suddenly need repayment certainty.
Is a Variable Loan better for First Home Buyers?
A variable rate is ideal for buyers prioritizing flexibility to make extra payments and use an Offset Account to save interest. Alternatively, a Split Loan can offer a blend of certainty (fixed) and flexibility (variable).