Basic Variable Rate Home Loans

Rates and Fees verified correct on March 30th, 2017

Don't pay higher interest rates and fees for features you won't use

A basic home loan is a home loan which is light on features and as a result, it  has a lower interest rate and mortgage fees. This type of home loan is useful for borrowers who won't want the bells and whistles, and would rather focus on lowering their periodic repayments and ongoing costs.

Use this page to compare basic variable rate loans and learn about how you can compare basic variable rate loans effectively.

Compare basic variable home loans

Rates last updated March 29th, 2017.

Heritage Bank Discount Variable Home Loan - Special Rate Offer (Owner Occupier) New Customers Only

Advertised rate dropped to 3.79%

August 24th, 2016

IMB Standard Variable Home Loan - LVR <= 90% Investor

Comparative rate increases by 0.10% | Interest rate increases by 0.10%

January 30th, 2017

HSBC Home Value Loan - Resident Owner Occupier only

Application fee waived for Resident Owner Occupier only.

February 15th, 2017

View latest updates

Jodie Humphries Jodie
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Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment
HSBC Home Value Loan - Resident Owner Occupier only
Enjoy the low variable rate with $0 ongoing fee and borrow up to 90% LVR.
3.75% 3.77% $0 $0 p.a. 90% Go to site More info
NAB Base Variable Rate Home Loan - Owner Occupier (P&I)
A competitive no frills home loan with no application fees for a limited time.
4.17% 4.21% $600 $0 p.a. 95% Go to site More info
Switzer Home Loan
No upfront or ongoing fees and a competitive variable rate for owner occupiers.
3.89% 3.89% $0 $0 p.a. 90% Go to site More info
Heritage Bank Discount Variable Home Loan - Special Rate Offer (Owner Occupier) New Customers Only
Pay no application fee and get access to this discounted rate for a limited time.
3.79% 3.81% $0 $0 p.a. 95% Go to site More info
IMB Budget Home Loan - LVR <=90% (Owner Occupier)
A competitive budget rate without any unwanted bells and whistles.
3.87% 3.92% $445 $0 p.a. 90% Go to site More info
4.52% 4.82% $0 $395 p.a. 95% Go to site More info
State Custodians Breathe Easy - LVR 80% (Owner Occupier)
Special Owner Occupier Rate. Free Offset Account.
3.82% 3.85% $0 $0 p.a. 80% Go to site More info
Beyond Bank Low Rate Special Home Loan
A special low variable rate for Owner Occupier with 100% offset account and no application or ongoing fees.
3.83% 3.83% $0 $0 p.a. 70% Go to site More info
IMB Standard Variable Home Loan - LVR <= 90% Investor
A standard variable home loan with minimum loan amount of $10,000 and no ongoing fee.
5.41% 5.46% $445 $0 p.a. 90% Go to site More info
St.George Basic Home Loan - Promotional Rate (Owner Occupier, P&I)
A no frills loan with a competitive rate and a maximum LVR of 95%.
3.98% 3.99% $0 $0 p.a. 95% Enquire now
Pacific Mortgage Group Standard Variable Home Loan - Owner Occupier
Borrow up to 90% LVR with no application or ongoing fee.
3.60% 3.60% $0 $0 p.a. 90% Enquire now
Aussie Optimizer Variable Rate - LVR <= 80% (Owner Occupier + P&I)
No application or ongoing fees and fee free extra repayments.
3.86% 3.87% $0 $0 p.a. 80% Enquire now
3.79% 3.86% $0 $0 p.a. 80% More info
Pacific Mortgage Group Standard Variable Home Loan - Investor
Borrow up to 90% LVR with no application or ongoing fee.
3.79% 3.79% $0 $0 p.a. 90% Enquire now

What is a basic variable rate home loan?

A basic variable home loan is essentially a 'no-frills' home loan that doesn't offer any additional bells and whistles. In return for opting for this basic product, many banks and lenders offer basic variable home loans to customers at discounted interest rates and with lower fees. The interest rate itself is still a variable rate, so it's subject to move up and down in line with fluctuations in the market. However, lender's will usually offer a set discount, below whatever the standard variable rate is at the time of application.

Competition between banks is quite fierce, so the deals available on basic variable home loans often feature some of the cheapest interest rates on the market. Still, the best loan isn't the one with the lowest rate, so the key to choosing the right loan is to compare it's features and look into how they might help you achieve your financial goals now and in the future.

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What are the features of a basic variable rate home loan?

Basic variable loans don't come with all the additions of a full-featured loan, but more often than not, these loans are more than just an interest rate and repayment date. Common value adding features of basic variable rate home loans include:

  • A cheap interest rate: The most prominent feature of a basic variable home loan is the cheaper interest rate. This is often significantly lower than the standard variable rate offered.
  • Additional repayments: You are usually able to make additional repayments off a basic variable rate mortgage at any time, in most instances without incurring a charge.
  • Redraw facility: This allows you to withdraw any extra payments you've made on top of the normal repayment amounts if you need the cash.
  • Lump sum payments: If you have a large sum of money, you are able to deposit this into your basic variable mortgage account without penalty.
  • No account-keeping fees: Most basic variable loans don't have monthly account-keeping fees charged on your loan account.
  • No early repayment fees: If you repay your mortgage early, by selling your home or refinancing to another lender for example, you shouldn't be charged any early repayment fees.
  • Construction option: Many basic variable loans offer a construction option, including progress draws to your builder.
  • Interest-only: Instead of making full principal and interest payments, you can opt to make interest-only payments. This is great for investors.
  • Top up: You are able to 'top-up' or increase your original mortgage amount if you need more money.
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Who are basic variable home loans available to?

A basic variable rate loan may be perfect for you if:

  • You are a first-time buyer. Comparing and applying for your first loan is only half the battle. Once your loan is approved, you have to manage that debt for the next 25 to 30 years. In most cases, mortgage debt will be a new experience and it can take some getting used to. First home buyers can benefit from a basic loan product through its simple, unconfusing structure. You can make repayments easily, save money on a low interest rate and also be rewarded with limited features that allow extra repayments and the ability to redraw if funds are needed down the track.
  • You want to stay settled. Most people are continually on the move whether at work or home. So you may not be surprised to learn that the average life of a home loan now is 20 months. In this space of time, borrowers have found a better deal and refinanced their mortgage with another lender. But not all of us want to change lenders every two years - a basic variable home loan is perfect for people in this situation. You can benefit from a simple home loan that allows you to make your monthly repayments and not give your home loan another thought besides the fact that you're getting a good rate and you're not paying for features you're not using.
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How to compare basic variable home loans

When you're comparing basic variable home loans, don't be tempted to jump at the one that has the lowest advertised interest rate. There are some other things you need to consider in order to compare your options accurately. These include:

  • Redraw limitations: Some lenders will impose limitations on the redraw facilities attached to their basic variable home loans. These include setting a minimum amount you're able to redraw, or charging a fee each time you access the redraw facility. Always check whether these things apply.
  • Set-up fees: While the cheap interest rate you see up front might look attractive, always check what other fees will apply to your loan. Establishment fees, application fees, valuation fees, documentation fees, legal fees, settlement fees, and any ongoing monthly fees are common among most loans.
  • Comparison rates: Always ask to see the comparison rates for any basic variable mortgage you're considering. The comparison rate adds together the interest rate, plus any setup fees and ongoing fees. This figure is then expressed as a percentage. It shows you exactly how much the loan will cost you, which may be slightly different to the advertised interest rate you see. If it is considerably higher, you know you're paying extra fees and costs on top of your interest payments somewhere. Ideally, the comparison rate should be calculated based on your own mortgage amount and your loan term to ensure you're getting a proper comparison. It will also help to ensure you really are getting the cheapest interest rates you can find overall.
  • Comparison shopping: While the comparison rate is a good guide, you also need to weigh the loan's features against its true cost. If you really do believe you'll need access to a redraw facility in the future, you will need to factor this in when making a decision about the loan that is right for you.
  • Customer service. This is a more difficult loan aspect to compare, but you should take into account a lender's customer service. Ask friends or family if they've had experience with the lender, or look for customer reviews of the lender on independent review websites. If you call the lender, ask them if you'll be dealing with one service representative throughout the whole experience or if they'll change. Also ask about the types of ways you can contact them, and how you can leave feedback and complaints.
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What do I need to apply for a basic variable home loan?

In order to apply for a basic variable home loan, you will need to provide your lender with the following information:


All new home loan applications will require that you provide identification to prove who you are. Suitable documents might include:

  • Driver's licence
  • Passport
  • Proof of age card
  • Birth certificate (and marriage certificate, if your last name is now different to your birth name)
  • Medicare card
  • Council rates notice
  • Credit card

Income verification

You'll need to supply a couple of recent payslips, plus a PAYG payment summary or a tax assessment notice to verify your income. If you have other income coming into the household, you'll need to verify this too. This might include Family Allowance payments, child support payments, dividend income or rental income.

If you're self-employed, you will need to provide two full financial years' worth of financial statements. Some banks may require you to also supply Business Activity Statements (BAS) if your application is lodged after December, as this is often six months after the last financial statement was prepared.

Assets and liabilities

The application form for your basic variable home loan will ask for information about your current assets and liabilities. You will need to know the approximate values of your assets, including real estate, cars, amounts in savings accounts, and superannuation. You'll also need to provide outstanding balance amounts for any debts you currently have.

Current repayments

All lenders will want to know what your current repayment obligations are. You will need to know how much you pay each month on any outstanding loans, credit cards, store cards or any other debts you have.


If you're refinancing your existing mortgage from your current lender to a new lender, you'll need to supply usually 12 months of statements for your current home loan. This shows the lender if you've been diligent about making your repayments on time. If you're including any debt consolidation amounts into your refinance, you'll also need to provide statements for any accounts that are being consolidated, such as credit card statements or personal loan statements.

Deposit amount

If you are not using existing equity in your home to secure your mortgage, you'll need to provide evidence of where your deposit is coming from. This will mean providing bank statements for your savings account showing that you have been maintaining a regular savings plan.

Contract of sale

If you're purchasing a home, you will need to provide a signed, fully executed contract of sale along with your application.

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Tips for managing a basic variable rate home loan

Tips Managing a basic variable home loan should be relatively easy but there are always things to research and consider before you submit your application. Here are some simple tips to help you get started on the right track.

Interest rate

While you might have been attracted to a particular loan because of the interest rate, it's always worth checking whether the discount applied to the basic variable rate is a set amount below whatever the standard variable rate is. For example: some lenders will guarantee that their basic mortgage will always be 0.7% below their standard variable rate, so if rates move up or down you'll know your rate will move up or down at the same increments. Other lenders won't guarantee the discounted amount, which can mean that even if the standard variable rate is reduced by 0.25%, your basic variable loan might only reduce by 0.2%.


Most lenders will allow you to set up direct debit payments from your regular transaction account for your payments to be taken out of. You should also be able to choose your payment frequency, so your payments can be set so they're made weekly, fortnightly or monthly. There are also some lenders that will let you set up your payments so they're made by salary crediting. This is where your payroll officer at work pays a portion of your salary directly into your home loan account, while the rest goes into your normal transaction account.

Additional repayments

Most lenders will give you various options for making extra payments on your mortgage. You can usually elect to pay more than the minimum payment amount as part of your regular repayment. If you wish to just pay extra money when it suits your budget, you should be able to transfer funds electronically from your transaction account or savings account straight into your home loan account.

Linking other accounts

Your basic variable home loan might not be with the same bank as your regular transaction account. If you ever wish to redraw any extra payments you make on to the loan, you will need to nominate an account for the money to be transferred to. Always check that you can link a transaction account to your home loan account for this reason.

Redraw facility

Even though most basic mortgages feature a redraw facility, it always pays to check any conditions that will apply. For example, some lenders may not allow you to redraw your additional repayments unless you withdraw a minimum of $500 or $1000. Other lenders may charge you a redraw fee each time you use this facility.

How do I manage a basic variable home loan?

The majority of lenders offer several ways to manage a basic variable home loan. These include:

  • Over the counter transactions in the bank branch
  • Online access via internet banking platforms
  • Smartphone access via mobile banking apps
  • Phone access via telephone banking
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Pros and cons of a basic variable rate home loan

There are plenty of benefits to choosing a cheap basic variable rate home loan, but you'll also find there are some disadvantages too.


  • Cheap interest rate
  • Low or no ongoing fees
  • Ability to choose interest-only repayments, if desired
  • Can make additional repayments without penalty.


  • Variable interest rate is subject to fluctuations, so they can rise and fall
  • Repayments can increase if interest rates rise
  • Redraw facility can be subject to limitations, including minimum withdrawal amounts and redraw fees.
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Should I make extra repayments?

Any extra repayments you do make on a basic variable home loan will actively reduce your outstanding balance. As the interest charged on your mortgage is calculated daily on your balance, this can reduce the amount of interest you pay overall. You'll be saving money on interest charges and reducing the term of your loan.

Should I fix my interest rate?

A fixed rate home loan works differently to a variable rate home loan. While your loan's interest rate is fixed, your repayments won't change.

During the fixed rate term, you may be limited to the number of extra payments you're able to make before you're charged penalties. You may also find that steep break fees apply if you break out of your fixed rate term before it has expired, such as refinancing or selling your home. Many fixed rate home loans also won't allow you to redraw any additional payments you've made.

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This page was last modified on 1 March 2017 at 9:39am.

HSBC Home Value Loan - Resident Owner Occupier only

Enjoy the low variable rate with $0 ongoing fee and borrow up to 90% LVR. Essentials - Variable (Owner Occupier, P&I)

A competitive interest rate home loan with interest only options. Interest rate 3.59%p.a.
comp rate of 3.61%p.a.

Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤85% ($150K+ Owner Occupier)

Discount off an already competitive interest rate for loans over $150k. NSW, QLD and ACT residents only.

Newcastle Permanent Building Society Premium Plus Package Home Loan - New Customer Offer ($150,000+ Owner Occupier)

Apply for a new owner occupier loan or refinance from another lender and receive this discounted rate.

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4 Responses to Basic Variable Rate Home Loans

  1. Default Gravatar
    Brian | April 30, 2015

    Hi im not sure if my last question sent or not
    I have a home loan with you and am wondering if we can make interest only payments for a couple months as we have had some unexpected expenditure of late

    • Staff
      Belinda | May 20, 2015

      Hi Brian,

      Thanks for your enquiry.

      As is an online comparison service, we are not a lender.

      You will need to contact your lender directly to discuss whether or not you can make interest-only payments for a given period of time.


  2. Default Gravatar
    Brian | April 30, 2015

    I have a home loan with you guys and am wondering if I can make interest only payments for a couple of months as we have had some unexpected expenses of late

    • Staff
      Jodie | May 11, 2015

      Hi Brian,

      Thank you for getting in touch.

      You have contacted a financial comparison site, please contact your lender directly to discuss alterations of your repayments with them.


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