Variable home loan rates

Compare some of the best variable home loan rates available right now, so you can save money on your mortgage.

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This article was fact-checked and reviewed by , an accredited and award-winning finance broker and industry mentor. Content has been updated for 2021.

Variable home loans rates are the lowest they've ever been. They generally offer more flexible repayment options than fixed rate loans and the ability to make extra repayments. Compare current variable home loan rates and pay less in mortgage repayments using the table below.

Athena Celebrate Home Loan - 60% LVR Owner Occupier, P&I

1.99 %p.a.

variable rate

1.99 %p.a.

comparison rate

Athena Home Loan Offer

Apply for the Athena Celebrate Home Loan - 60% LVR Owner Occupier, P&I and get a low variable interest rate, plus no application and ongoing fees.

  • Interest rate of 1.99% p.a.
  • Comparison rate of 1.99% p.a.
  • Application fee of $0
  • Maximum LVR: 60%
  • Minimum borrowing: $100,000
  • Max borrowing: $2,000,000
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Compare variable home loan rates

Name Product Interest Rate (p.a.) Comp. Rate (p.a.) Fees Monthly Payment

Athena Variable Home Loan P&IHome≥ 40% Deposit

Athena Variable Home  Loan
  • App: $0
  • Ongoing: $0 p.a.
Owner occupiers with 40% deposits or equity can get this competitive variable rate loan. No upfront or ongoing fees.

Well Home Loans Equity Plus P&IHome≥ 40% Deposit

Well Home Loans Equity Plus
  • App: $250
  • Ongoing: $0 p.a.
Borrowers with 40% deposits or equity can get this low variable rate loan. 100% offset account included.

Nano Variable Home Loans P&IHome≥ 25% Deposit Refi Only

Nano Variable Home Loans
  • App: $0
  • Ongoing: $0 p.a.
Switch to this competitive variable rate with zero fees. Requires a 25% deposit.

HSBC Home Value Loan P&IHome≥ 30% Deposit

HSBC Home Value Loan
  • App: $0
  • Ongoing: $0 p.a.
$3,288 refinance cashback offer
This competitive variable rate loan is available for borrowers with 30% deposits. Eligible refinancers borrowing $250,000 or more can get a $3,288 cashback. Terms and conditions apply.

Macquarie Bank Basic Home Loan P&IHome≥ 40% Deposit

Macquarie Bank Basic Home Loan
  • App: $0
  • Ongoing: $0 p.a.
Apply for the Macquarie Bank Basic Home Loan - LVR ≤ 60% (Owner Occupier, P&I) and get a low variable interest rate, plus no application and ongoing fees. Requires a 40% deposit.

Westpac Flexi First Option Home Loan P&IHome≥ 5% Deposit

Westpac Flexi First Option Home Loan
  • App: $0
  • Ongoing: $0 per month
$3,000 refinance cashback
A flexible and competitive variable rate loan. Available to owner occupiers on principal and interest loans. $3,000 cashback for eligible refinancers. Apply by 30 November 2021. Terms and conditions apply.

Nano Variable Home Loans P&IInvestment≥ 25% Deposit Refi Only

Nano Variable Home Loans
  • App: $0
  • Ongoing: $0 p.a.
Investors can refinance this no-fee variable rate loan. You will need a 25% deposit. Fast online approval. Smart Booster Discount Variable Home Loan P&IHome≥ 20% Deposit Smart Booster Discount Variable Home Loan
  • App: $0
  • Ongoing: $0 p.a.
Get a low discounted variable rate loan. Requires a 20% deposit. Get your loan processed fast and settle within 30 days.

Suncorp Back to Basics Home Loan P&IHome≥ 20% Deposit

Suncorp Back to Basics Home Loan
  • App: $0
  • Ongoing: $0 p.a.
A competitive variable interest rate loan with low fees. The establishment fee is waived if you borrow $150,000 or more.

Australian Unity Health, Wealth and Happiness Package Home Loan P&IHome≥ 20% Deposit

Australian Unity Health, Wealth and Happiness Package Home Loan
  • App: $0
  • Ongoing: $399 p.a.
A flexible and competitive variable rate package loan with a 100% offset account.

UBank UHomeLoan Variable Rate P&IHome≥ 20% Deposit

UBank UHomeLoan Variable Rate
  • App: $0
  • Ongoing: $0 p.a.
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.

Australian Unity Wealth Builder Investor Package Variable Home Loan P&IInvestment≥ 30% Deposit

Australian Unity Wealth Builder Investor Package Variable Home Loan
  • App: $0
  • Ongoing: $399 p.a.
Investors can get a competitive variable rate on this package loan. 100% offset account included. Requires a 30% deposit.

Nano Variable Home Loans IOHome≥ 25% Deposit Refi Only

Nano Variable Home Loans
  • App: $0
  • Ongoing: $0 p.a.
An interest-only loan for refinancing owner-occupiers with 25% deposits or equity. This loan has no fees.

Well Home Loans Balanced Variable P&IHome≥ 20% Deposit

Well Home Loans Balanced Variable
  • App: $250
  • Ongoing: $0 p.a.
A very low interest rate for home buyers with 20% deposits saved. Add an offset account for a small fee.

Nano Variable Home Loans IOInvestment≥ 25% Deposit Refi Only

Nano Variable Home Loans
  • App: $0
  • Ongoing: $0 p.a.
This variable investment loan has interest-only repayments and is for refinancers only. Fast online approval. Requires a 25% deposit.

Athena Variable Home Loan P&IHome≥ 30% Deposit

Athena Variable Home  Loan
  • App: $0
  • Ongoing: $0 p.a.
A low variable rate for owner occupiers with 30% deposits. No upfront or ongoing fees.

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What is a variable interest rate home loan?

A woman enquiring about variable rate home loans on the phone
A variable interest rate home loan is one that can vary. The repayments can rise or fall each month, depending on whether the lender decides to change the interest rate on that particular loan. An interest rate increase means your repayments rise, but a rate drop means your repayments could get cheaper. This is the opposite of a fixed rate, which remains the same during a set period of time.

Lenders raise or reduce their interest rates for a number of reasons, including:

  • If the official cash rate set by the Reserve Bank (RBA) changes; a cash rate decision happens on the first Tuesday of every month, except for January.
  • If they pay more in funding costs (which is where they get the money they lend out for mortgages) and they want to pass those costs on to customers.
  • If their competitors changes rates and they see an opportunity to change rates to remain competitive (cut rates) or increase their profits (increase rates).
  • To attract new customers; sometimes lenders will reduce interest rates for new customers, but keep them the same or even raise them for existing borrowers.

Despite these reasons, variable rate mortgages don't usually change every month. On average, your home loan interest rate may only change once or twice a year.

Types of variable home loan products

Most lenders offer multiple variable rate home loans. The most common variable loan types are basic variable home loans, standard variable home loans and introductory discount variable rate loans.

There are big differences between these loan types.

Basic variable home loans

Like it says in the name, these loans keep it simple. A basic variable loan has a lower rate than a lender's other products (usually) and doesn't have as many features. If you want a simple variable rate loan with no offset account, a basic loan is a good option.

Introductory discount home loans

These loans are often the lowest variable rate loans a lender offer – even lower than its basic loans, if it has those. But here's the catch: after that initial discounted period, the rate will revert to a higher variable rate.

Also, even though these loans are cheaper when it comes to interest rates, they can also be limited in features. For instance, they generally don't come with an offset account, which can be a meaningful way to pay less interest on your home loan. As attractive as the rate may be, this type of loan may not necessarily work for you if you need to offset a large amount of savings or money that might be coming your way, such as an inheritance.

Here's an example:

  • Home loan: Two-year introductory special discount variable home loan
  • Introductory rate: 1.99%
  • Revert rate: 2.35%

In plain English, this home loan starts at 1.99% for the first two years and then reverts to a higher (but still competitive) rate.

Introductory discount variable rates can be great home loans. You just need to be aware that the low rate won't last forever. And if it does jump up too high you should consider refinancing to a better rate.

Compare introductory discount variable home loans

Standard variable rate loans

Standard variable rates are a bit of a throwback. These are the benchmark variable rates used by the Big Four banks and some other lenders.

Standard variable rates are often considered to be a default offer. But these products have much higher rates than the most competitive loans offered by lenders.

The best variable home loan has a low rate and suits your needs

The best variable rate home loan really depends on your needs as a borrower. If you're an investor planning to "flip" a property quickly you need a very different variable mortgage compared to an owner-occupier looking to buy their first home.

Here's what borrowers need to look at when searching for the right variable home loan rate:

Get a low variable rate

With any home loan, a lower interest rate makes for a better home loan. A lower rate means lower repayments and it makes your home loan cheaper.

Here's a quick example using the same loan amount but with a 31 basis point (0.33%) difference in the rate:

DetailsHigher rateLower rate
Loan amount$400,000$400,000
Loan term30 years30 years
Interest rate2.50%2.19%
Monthly repayments$1,580$1,516
Savings (monthly)N/A$64
Savings (yearly)N/A$768
Savings (30 years)N/A$23,040

You can use a repayment calculator to see the difference between various rates or check the repayment column in the loan table above.

Look at the loan purpose and repayment type

Even the lowest rate on Earth is not very useful if you have the wrong loan type. If you're looking to finance an investment property then you will need an investment loan. If you're buying or refinancing a loan for the home you live in then you need an owner-occupier home loan.

Principal and interest versus interest-only loans

Beyond the loan purpose there's also the repayment type. Variable home loans can have either principal and interest repayments or interest-only repayments. And there are big differences between them.

Principal and interest loans mean you repay the loan (the principal) and interest charges together. This is the most common type of variable home loan, especially for owner-occupiers.

Variable interest-only loans let you avoid repaying any loan principal at first. This makes your repayments cheaper to start with. But over time, once you start repaying the debt your repayments jump up and you end up paying more in the long run.

Interest-only loans are more common for investors using specific investment strategies. But owner occupiers can use them too.

Get a loan with the right features

A variable loan's features can be useful, if you use them. For example, if you have extra savings, you can use an offset account to save the cash and minimise your interest payments. Or, a redraw facility might help you have access to money if you need it down the track.

If you don't need this feature, you can look for a loan without it, which might have a lower interest rate.

Extra repayments

Extra repayments are a common feature on variable rate loans. Being able to make extra repayments can help you repay your loan faster and pay less interest. Although it's worth noting that if your loan has an offset account you can put the extra repayments there instead of making extra repayments. It has the same effect but gives you more control over the money.

Look for a loan with low fees

A variable rate home loan can come with a range of fees. If the loan works for you and the interest rate is low, a few fees aren't so bad. But if you can avoid fees, then why pay more?

Another advantage of a variable rate loan over a fixed loan is that refinancing is cheaper. There may be a loan discharge fee, but exit fees no longer apply on variable rate loans. Some break costs may apply, such as the cost to deregister your mortgage with the government, and other statutory costs like these.

Compare more home loan options here

How does the RBA cash rate affect variable rate loans?

Every month (except January) the Reserve Bank sets the official cash rate. This rate affects the funding costs of variable home loan interest rates. If the rate rises, you can expect lenders to increase their variable rates. If the rate falls, most lenders will pass on some (or all) of the cut to their variable rate customers.

When the RBA cuts

In 2019, the RBA cut the cash rate three times, in June, July and October and then it cut twice in March 2020. Each cut was 25 basis points (or 0.25%). This meant big savings for variable borrowers, with some lenders passing on close to the full 25 basis points each cut.

However, when the RBA cut the cash rate again in November 2020 lenders cut fixed rates instead. So the RBA's decisions are no longer a clear benchmark for what will happen to variable interest rates.

When the RBA raises rates

In 2010, the Reserve Bank raised the cash rate four times, which meant many variable borrowers found their interest rates increasing substantially.

Should I choose a variable home loan rate or a fixed rate?

While variable rates can change any time, there are several reasons many borrowers prefer them.

Greater flexibility

With a fixed rate home loan you are locked in for a specified period of time. While your rate won't change, it's harder to refinance or exit during the fixed period. The break costs to do so can run into the thousands of dollars.

Variable rate loans don't have that issue as there are no breaking costs on these loans.

More loan features

You may be able to find a competitive fixed rate loan with an offset account, but you have a lot more options when it comes to mortgage features if you're shopping for a variable rate loan. The same goes for redraw facilities, which allow you to make extra repayments and then pull the money back out to spend if you need it.

Some fixed rate loans limit the amount you can make in extra repayments and restrict the amount you can redraw. It's always important to read the fine print to see if there are any fees associated with redraw and/or restrictions with minimum redraw amounts or frequency allowed, as some banks may charge you if you you need them to assist you with redraw over the phone or in branch, whereas online transactions are generally free. Make sure you read the fine print.

Variable rates are not the lowest rates on the market at the moment

In recent years variable rates have reliably been lower than comparable fixed rate loans. According to Finder's lowest home loan rate tracker, in November 2018 the lowest variable rate owner-occupier loan had a rate of 3.54%. The lowest fixed rate then was 3.74%. That's a 20 basis point difference.

In January 2021 the lowest fixed rate was 1.89%, beating out the lowest variable rate of 1.99%. Looking across offerings on the market it's clear that a lot more fixed rates start with a 1, while most of the lowest variable offers start with a 2.

Low rates are here to stay

With both fixed and variable rates being so low at the moment the choice to fix is more complex than ever. You could actually lock in a very competitive rate for several years. At the same time, the Reserve Bank of Australia has made it fairly clear that the low rate environment will be here for the next few years. This means there's less urgency to fix.

Read more on fixed versus variable rates

Still unsure? Consider the split loan option

Australian borrowers don't have to pick between variable and fixed. Many lenders allow you to split your loan into fixed and variable portions. You can divide your loan amount into equal fixed and variable portions, or in any proportion you choose.

Splitting lets you enjoy the stability benefits of a fixed rate and the flexibility of a variable rate. It's a little complicated, but your lender or a mortgage broker can help you calculate the best split for you.

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    20 Responses

      Default Gravatar
      KeithOctober 4, 2019

      We have a current Reverse Mortgage with Bankwest which was established several years ago. Can you tell me what the current rate is we would be incurring and if it is a Variable Rate and any hidden charges involved.

        Default Gravatar
        NikkiOctober 6, 2019

        Hi Keith,

        Thanks for getting in touch! It is helpful to know that while we compare variable rate home loans on our page, we do not have the actual current rate is per lender and in this case, Bankwest. It would be best to get in touch with your preferred lender to obtain more information on monthly repayments.

        Hope this clarifies! Feel free to reach out to us again for further assistance.


      Default Gravatar
      NHAugust 30, 2018

      I am wanting to consolidate all my outstanding into my home loan. I also want to change my financial institution to have a better lower interest rate. Also will it be better to have variable or fixed with what I am wanting to do? Please can you help?


        Avatarfinder Customer Care
        JoshuaAugust 30, 2018Staff

        Hi NH,

        Thanks for getting in touch with Finder. I hope all is well with you. :)

        Let me address your concerns one by one.

        1. I am wanting to consolidate all my outstanding into my home loan.

        You may want to consider refinancing to consolidate debt. This type of home loan allows you to pay out your credit card and personal loans under your mortgage. Instead of paying off multiple debts, you pay off all of your debts with one home loan repayment each month. This also means your debts are only charged at a home loan interest rate – which can be much lower than a credit card or personal loan interest rate.

        2. I also want to change my financial institution to have a better lower interest rate.

        Please refer to the guide I shared with you above. When you’re on the page, please refer to the table under the subheading “Which lenders offer debt consolidation options when refinancing?” By doing so, you will see different financial institutions that might be able to help you.

        3. Also will it be better to have variable or fixed with what I am wanting to do?

        While we can’t provide personalised recommendations, it would be a good idea to know the difference between fixed and variable home loans.

        On that page, you will know more about variable and fixed interest home loans, which include their advantages and disadvantages.

        Finally, please speak to a mortgage broker to help you explore your different options. They have the right skills and knowledge to ensure you make the right decision.

        I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

        Have a wonderful day!


      Default Gravatar
      SafiaOctober 17, 2017

      How many financial institution offer construction loans and what are things to look out for before choosing a financial institution.

        Default Gravatar
        MariaOctober 17, 2017

        Hi Safia,

        Thanks for reaching out to Finder.

        You may want to check out lenders from our Construction Loans page. It also includes tips and information on how to choose a construction loan and some other frequently asked questions which you can find at the bottom of the page.

        Before applying, please ensure that you meet the eligibility criteria and requirements and to read the details, as well as the relevant Product Disclosure Statements/ Terms and Conditions of the option before making a decision and consider whether the product is right for you.

        Once you’ve chosen a lender, you may click on “Go to Site” to be directed to their main website where you can start your application.


      Default Gravatar
      JamesAugust 3, 2017

      So I just re-financed my home to go to a cheaper rate at a diffrent bank and my property got valued at 600.000 when I only have 300,000 left on property so where does the other 300,000 go.can I take some for me and put in on top of the loan for eg: 50k for me then loan will be 350,000 instead of 300,000 since I don’t need the whole 600,000 to move over

        Default Gravatar
        LiezlAugust 3, 2017

        Hi James,

        Thanks for your question.

        The difference of $300,000 is your home equity which you can use for investment purposes or for a wide variety of reasons such as pay up-front university fees for your children, for an extended overseas holiday, or home repairs and cosmetic renovations. For more details, please feel free to read our guide on refinancing home loans.


      Default Gravatar
      CarolJune 17, 2016

      Hi If I reach retirement age and still have a home loan of say $100000, what is the longest term you can pay interest only repayments?

        Avatarfinder Customer Care
        MarcJune 20, 2016Staff

        Hi Carol,

        thanks for the question.

        This will depend on the lender, as each will have its own unique lending criteria. It might be a good idea to consult a mortgage broker to find out the longest term available to you for your situation.

        I hope this helps,

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