Aussie Home Loans can help you sort through overwhelming jargon and find the right home loan from thousands of products.
With an extensive broker network across the country, you'll be given a dedicated mortgage broker to walk you through the entire journey from saving your deposit to refinancing your home loan over the years to come.
Variable rate home loans have interest rates which can go up or down at any time, changing the cost of your repayments.
These home loans are more flexible as you can usually make extra repayments and repay the loan early without penalty.
The best variable rate loans have low interest rates and fees. You're also more likely to benefit from features like offset accounts.
How to compare variable rate home loans
Don't settle for a third-rate home loan. Make sure you get the best variable rate home loan deal by looking at 4 things:
1. The interest rate
The interest rate determines how expensive your repayments will be. The lower the rate, the better.
2. Fees
Most home loans have some fees, but some have almost none. The key ones to watch out for are application fees, monthly fees and settlement fees.
3. Loan purpose
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 your home then you need an owner-occupier home loan.
4. Loan features
Variable rate loans come with the most features. You can make extra repayments to pay the loan off faster. And most variable rate loans have a redraw facility too.
Some variable rate loans have an offset account, which functions like a bank account. But instead of earning interest on the savings it reduces your loan's interest charges and gets you out of debt faster.
What's a comparison rate?
When you look at variable interest rates you'll see there's also a comparison rate. The comparison rate can be a more accurate reflection of the interest you'll be paying, as it includes additional fees.
However, it's based on a fairly small loan amount over 25 years so won't be a true reflection for every borrower.
Our expert says
"If you have a variable loan, it's a great idea to also have an offset account. While that can mean extra costs, it allows you to offset your savings against your loan and can save a lot in a high-interest world."
Loan-to-value ratio: The minimum deposit you have will impact the variable interest rate you get. A higher loan against the property price will usually lead to a higher interest rate.
RBA: As the RBA decides what the national cash rate is doing, variable interest rates will follow.
Home type: Whether you're buying a home to live in or an investment property will change the interest rate you get.
Features: Very often, variable loans with additional features like an offset account might mean you pay a slightly higher interest rate.
Pros and cons of a variable rate home loan
Pros
You benefit from rate cuts: Even if rates rise during your loan term you may still have benefited over the longer term
More flexibility: Variable rate loans usually allow you to make unlimited extra repayments, whereas fixed rate loans have limits.
Early repayment: You can usually pay off your loan without penalty.
Cons
You deal with rate hikes: If interest rates rise, so will your mortgage repayments.
Harder to budget: Because rate changes can make your repayments change, you'll need to keep reassessing your budget.
Higher rates: With interest rate cuts in 2025, variable rates have been slightly higher than some fixed rates on the market.
Variable home loans market update for December 2025
The lowest variable home loan rate right now on Finder is 4.99%.
The average variable home loan rate on the market is 6.46%.
Variable home loan rates decreased throughout 2025 as the RBA cut the cash rate. Halfway through the year there were expectations that the rate cuts could continue into 2026. But in the final month of 2025, that's all changed.
The October and November inflation figures even led some to question whether December could see a rate increase. But the RBA announced on Tuesday, 9 December it would be keeping the cash rate where it is.
For variable rates this means nothing should change, although it is entirely up to the banks to do what they want with rates. In Finder's RBA survey for December, experts are completely split between whether interest rates will rise, fall or stay where they are over the next 12 months.
Is now a good time to get a variable rate home loan?
Fixed rate loans are great when rates are rising fast. That was the case in 2022–23.
During 2025 we saw 3 interest rate cuts. This was good news if you have a variable rate loan. But it's important to remember that you can never actually guarantee how rates will move.
When deciding between fixed and variable it's more important to think about how comfortable you are with the current rate and whether you can afford more rate rises.
What's the difference between fixed rate and variable rate home loans?
Variable rate mortgages...
Go up and down over time. Lenders can change your rate at any time (usually when the RBA changes the official cash rate). In 2025 so far, the cash rate has fallen twice and most home loan rates have dropped with it.
Are flexible. You can repay a variable rate loan early or refinance and your lender won't charge any fees.
Usually have lower rates. Fixed rates are typically higher than variable rates (that's the price of certainty). But as we can see in the current rate environment that's not always the case. Fixed rates are currently lower than variable rates.
Fixed rate mortgages...
Won't change (for the fixed period). You can fix your rate for 1 to 5 years. And your repayments won't change during this time.
Turn into variable rates anyway. Once the fixed period ends you're back on a variable rate, but often this is higher than the advertised variable rate.
Are harder to break. Refinancing or repaying a fixed rate loan early comes with a break fee. This can cost thousands of dollars.
Still unsure? Consider the split rate 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.
Most borrowers go for a variable rate
A variable rate loan is really about flexibility: paying the loan off faster via an offset account or extra repayments.
And it's about being able to exit the loan or refinance without paying a break fee.
Most Australian borrowers choose a variable rate. According to the AFG Index, just 4% of borrowers chose a fixed rate in last 3 months of 2024.
"I'm team variable interest rate all the way. I don't fix my rate and I don't bother with a split rate either. For me, the value of a variable rate loan's flexibility and getting the full benefit of an offset account is so important. I can refinance whenever I need without penalty and if I decide to sell or make a big change that requires a new loan, it's so much easier."
Frequently asked questions about variable rate home loans
Interest rates have changed a lot over the last couple of years and they could change over the next few months as well. While good interest rates are important, remember to look at what other features and fees come with the loan.
While variable rate home loans are typically lower than fixed rates, situations arise where fixed rates become lower. This usually happens when lenders anticipate that variable rates will remain low for an extended period, or if the market believes the official cash rate will fall in the future, making fixed rates less expensive.
The choice between a fixed and variable rate home loan depends on individual circumstances.
Variable rates offer flexibility, often come with lower fees, and features like offset accounts, and are easier to refinance. Fixed rates provide repayment stability and protection against rising interest rates, but typically have less flexibility regarding extra repayments, offset accounts, and incur break fees for early exit.
Use our repayment calculator and speak to a mortgage broker if you want more information on what the right rate is for you.
Lenders are free to move your variable interest rate up or down whenever they want. In practice, lenders move rates in response to wider market and economic conditions.
While you can't really predict rate changes perfectly, it is possible to get a good sense of which direction rates are moving in.
The Reserve Bank of Australia (RBA) sets the official cash rate each month. This is a benchmark for lenders to set interest rates on variable rate home loans.
The RBA lowers interest rates to stimulate economic growth and encourage spending. When inflation is high, the RBA raises rates to cool spending and drive prices down.
Variable interest rates in Australia can change at any time, moving either up or down, based on market conditions and lender decisions.
Credit unions and online lenders have the lowest variable rate home loans. And for most borrowers, lowest rate = best.
But the big banks have really good apps and in-branch service. That can be a very big benefit.
Most lenders offer multiple variable rate home loans.
Basic variable home loans. A basic variable loan has a lower rate than a lender's other products (usually) and doesn't come with an offset account. These loans are all about the low rate.
Introductory discount home loans. These loans (sometimes called honeymoon home loans) are often the lowest variable rate loans a lender offers. But after the initial discounted period, the rate will revert to a higher rate. That's usually a good time to switch to a better loan.
Package home loans. These loans let you combine your mortgage with an offset account plus a credit card or other financial products. In exchange, you get discounted fees on the products and the convenience of having all your banking in one place. The downside? You pay an annual package fee of several hundred dollars.
Standard variable home loans. Standard variable rates are a bit of a throwback. These are the benchmark variable rates used for home loans with the Big Four banks and some other lenders. Most lenders discount the actual rate you get or will recommend a similar loan with a lower rate.
Interest rates rose rapidly in 2022 and into 2023, and didn't move much in 2024.
But in 2025 the RBA has begun lowering the cash rate again. Lenders have responded by lowering their variable rates.
A "good" interest rate will really depend on the loan you need for your circumstances. Right now, a high 5% interest rate is still competitive. The lowest variable interest rate on the Finder website at the moment is 4.99%, but not every borrower will necessarily be right for the lowest rate.
Variable home loan rates in Australia are largely pegged to the Reserve Bank of Australia (RBA)'s official cash rate. Changes in the RBA cash rate often lead to corresponding adjustments in variable home loan rates, although banks don't always pass on every change in full.
The primary drawback of a variable rate home loan is the uncertainty of repayment amounts. As interest rates can change at any time, your regular repayments may increase if rates go up, potentially impacting your budget and financial planning.
Yes, variable rate home loans generally offer greater flexibility, allowing borrowers to make extra repayments without incurring penalties. This feature can help you pay off your loan faster and save on interest.
Yes, it is generally possible to switch from a variable rate home loan to a fixed rate home loan, typically by refinancing your existing mortgage. Variable rate loans are often easier to refinance compared to fixed-rate loans, which may involve break fees.
Variable rate home loans often come with lower fees than their fixed-rate counterparts. While some competitive variable loans may have no application, ongoing, or exit fees, it's important to check the specific product disclosure statement as some may still carry certain charges. Variable loans typically do not have 'break fees' for exiting early, unlike fixed-rate loans.
Beyond the fluctuating interest rate, variable home loans commonly include features such as redraw facilities, which allow you to access extra repayments you've made, and offset accounts, which can reduce the interest you pay by linking your savings to your loan. They also often provide flexible repayment options.
Finding the best variable rate home loan for you
Every month, our home loan experts analyse more than 50 home loan rates from our database to find our best home loan picks. We only select home loans that are suitable for a typical borrower, so we don't include loans that require enormous deposits or have extra eligibility requirements.
We then rank these loans, with a scoring system that awards a higher score for loans with the lowest rates and fewest fees.
All our picks are from lenders with whom Finder has a commercial partnership. The best home loan looks a little different for every borrower and our picks may not be the best option for your situation.
These variable rate home loans offer low costs, coupled with a host of features, giving the best overall value.
7+
Great
These home loans may have slightly higher interest rates or fewer features but overall, a competitive offering.
5+
Standard
Usually the home loans would offer above average rates. They may still include some competitive features.
0+
Basic
Higher costs and/or fewer features.
What is Finder Score?
The Finder Score crunches 7,000 home loans across 120+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.
To provide a Score, we compare like-for-like loans. So if you're comparing the best home loans for cashback, you can see how each home loan stacks up against other home loans with the same borrower type, rate type and repayment type. We also take into consideration the amount of cashback offered when calculating the Score so you can tell if it's really worth it.
Richard Whitten is Finder’s Senior Money Editor, with over eight years of experience in home loans, property, credit cards and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard started his career in education and textbook publishing in South Korea. He holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University.
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I Just looking for one Investment Home loans for me if any one can help me please contect me
Finder
RebeccaJuly 16, 2025Finder
Hi there,
We’re a comparison site, so we don’t offer investment home loans ourselves. However we do have a range of investment home loans that you can look at here, and then you can get in touch with the lenders through the table.
Thanks,
Rebecca
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.
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.
Best,
Nikki
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?
Thanks
Finder
JoshuaAugust 30, 2018Finder
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!
Cheers,
Joshua
SafiaOctober 17, 2017
How many financial institution offer construction loans and what are things to look out for before choosing a financial institution.
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.
Best,
Maria
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
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.
Construction loan comparison is as simple as finding out how much you can borrow, then reviewing some of the best construction loans on the market to find the right fit.
What is an offset account? It can save you thousands in interest and help you own your home sooner.
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We try to take an open and transparent approach and provide a broad-based comparison service. However, you should be aware that while we are an independently owned service, our comparison service does not include all providers or all products available in the market.
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Where our site links to particular products or displays 'Go to site' buttons, we may receive a commission, referral fee or payment when you click on those buttons or apply for a product.
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I Just looking for one Investment Home loans for me if any one can help me please contect me
Hi there,
We’re a comparison site, so we don’t offer investment home loans ourselves. However we do have a range of investment home loans that you can look at here, and then you can get in touch with the lenders through the table.
Thanks,
Rebecca
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.
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.
Best,
Nikki
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?
Thanks
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!
Cheers,
Joshua
How many financial institution offer construction loans and what are things to look out for before choosing a financial institution.
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.
Best,
Maria
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
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.
Cheers,
Liezl