Variable Rate Home Loans

Standard Variable Rate

The Standard Variable Rate Loan is widely used in Australia by home owners and investors; it is most likely the most common loan that is featured in advertising and other printed and electronic media.

Standard Variable, as the name implies, the interest rate is variable, which means that it will fluctuate during the term of the loan.

Expect to have your repayments also move in line with the fluctuation of the loan.  While interest Rates are falling you will stand to benefit from the downward movement of the RBA Cash rate, and as a result so too will your repayments.

On the other hand the reverse is true, when interest rates are in an upward movement so too will your repayments adjust in line with this.

The features and the flexibility of this type of loan make it a popular choice.

When looking at the features of a Standard Variable Rate Loan, It could be a smart move to see if the extra features of a standard variable rate loan are right for you, you may find that you are paying for features that you won’t use, in which case it might be better to go with to a basic home loan.

Should you find that extra features such as redraw, a repayment holiday and or portability or any other such feature suit your requirements then this type of loan may be just what you need.

However in a lot of case’s all the extra features may be items that you are paying for but never use or need?

In this case if you find that you don’t need all the extras that come with a standard variable rate loan you may find that a Basic Variable loan may be more advantageous to you financial needs.

Loan term: Most lenders will offer anywhere between a 1 year to a 30 year loan term. There are now a number of lenders now offering 40 year loan terms.

 Features Offered:

•  Redraw
• Offset
• Loan Portability
• Additional Repayments and Lump sum repayments can be made without incurring a fee.
• Choice of Monthly, Fortnightly and Weekly Repayments.
• Loan Splits

Advantages:

• Flexibility
• Lower Fees
• More Features offered than Basic or Fixed Loans
• Variety of features offered.
• In a majority of cases a discount can be obtained by taking out a Pro-pack or professional pack, where a number of products are obtained from the same lender. i.e. credit card, savings account and transactional account

Disadvantages:

• A Rise in interest rates. Why is this a disadvantage? As interest rates increase the majority if not all lenders will seek to increase their interest rates in line with the RBA ( Reserve Bank of Australia)  interest rate policy. Thus increasing your repayment amount.

Other things to consider are:

So what options are best for you? 

That’s where the use of specialized software, and REAL investment expertise as well as a keen understanding of the mortgage market allows a Finance Consultant to advise home owners on the loan that really is best for their individual situation.

At Wealth Concerns, we have that expertise. We are experienced, independent mortgage brokers who can help you wade through the home loan maze and select the right mortgage for your individual needs ... from over 32 lenders. 

If you would like to discuss your specific circumstances call our message service on 1300 700 496 with your name and number and we will contact you back.

Alternatively text your name and number to 0411 320 962 and we will call you.