Basic Variable Loan

If you are after a loan without all the added features such as redraw or repayment holiday to name a few, then perhaps a Basic Variable Home Loan may be the way to go, these loans usually offer the Home Owner fewer features than a Standard Variable Loan.

In a lot of situations a Basic Variable Rate loan may be all that is needed, and with an interest rate that is usually lower than the more fully featured Standard Variable Rate there could be a huge cost saving, sometimes as much as $*** over the life of a $400,000 home loan.

Since a Basic Variable Rate loan does not have all the extra features of the SVR, it is for this reason that interest rates on a Basic Variable Home Loan are in most cases lower than the Standard Variable Rate.

If the features that are packaged into a Standard Variable Loan are not required, then a Basic Variable Loan may be more suitable to you.  Having a lower interest rate will save you money over the long term.

As with all loans, the features of a Basic Variable Loan will vary from lender to lender.  This is where the use of an Independent Finance Consultant (Mortgage Broker) is most helpful.

In a number of cases, lenders will not offer an offset account, and often do not offer any type of loan portability.  Since the Basic Variable Loan product is a Basic loan you don’t have as much flexibility then what is found in a Standard Variable Loan.

Loan term: up to 30 Years

Features Offered:

• Lower interest rates then SVR.
• Direct Crediting of Repayments.
• Simplicity
• Extra Repayments

Advantages:

• Lower interest rates which will result in lower repayments  

Disadvantages:

• Usually fewer features than a Standard Variable Loan. 
• Some lenders  will have higher exit fee’s should you leave the loan in the first five years.

Other Things to Consider are:

When considering a Basic Variable Loan, it pays to look at a few different lenders, as the features of a Basic Variable Loan can vary from lender to lender.   Comparing home loans is something you and your Broker will do while you are assessing the different lenders and products based on your needs and requirements.

At Wealth Concerns we always do a fact find before we recommend any product, as without knowing the needs and goals of the client it would be the same as a doctor prescribing medication without having assessing and diagnosing the clients symptoms.  

Exit fees – Some of the lenders that offer lower or discounted interest rates, will often have a high exit fee.  This will be usually be incurred if you exit the loan with in the first 1 to 5 years. Which may or may not be an issue, but should you wish to sell the property or refinance (i.e pay out early) then the exit fee could be substantial.

 Contact Us

If you would like to discuss your specific circumstances call us on 1300 700 496 or alternatively text your name and number to 0411 320 962 and we will call you.