Variable rate home loans are loans where the interest rate increase and decrease depending on the rate set by the Reserve Bank of Australia (RBA). Even though the RBA sets rate guides, lenders have the independence to set their own variable rates. Whilst variable rates fluctuate, variable loans more popular in Australia than any lowest fixed rates home loans. This reflects the overall low interest rates in the current market and the sense that rates will continue to fall.
The two types of variable home loans are:
Standard variable loan: The standard variable loan allows you to pay some of the principal amount as well as the interest at the same time. With features such as extra repayment options and redraw facilities, this loan helps you repay off your loan faster.
Basic home loan: With a low variable interest rate, the basic home loan has less flexibility than its standard counterpart.
The Finance Site allows its customer to find out the best variable home loan rates in Australia using their home loan interest rate comparison tool. For comparisons, please visit – best variable home loan rate.