Variable rate home loan comparison guide February 2018

Want a home loan with more features, flexibility and a competitive rate? Get a variable rate mortgage.

Variable rate home loans are some of the most popular and competitive mortgage products on the market. They offer greater flexibility and generally come with more features than fixed rate loans, but their interest rates can change at any time. Compare a wide selection of variable rate products in the table below, or read on to find out if this type of loan is right for you.

Home Loan Offer

HSBC Home Value Loan - Resident Owner Occupier only, P&I

3.59 % p.a.

variable rate

3.60 % p.a.

comparison rate

Home Loan Offer

The HSBC Home Value Loan is a low rate with no monthly fees. Enjoy premium service with a dedicated HSBC Relationship Manager.

  • Interest rate of 3.59% p.a.
  • Comparison rate of 3.60% p.a.
  • Application fee of $0
  • Maximum LVR: 90%
  • Minimum borrowing: $50,000
  • Max borrowing: $7,500,000
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Compare variable home loan rates

Rates last updated February 18th, 2018
$
Loan purpose
Offset account
Loan type
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Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.59%
3.60%
$0
$0 p.a.
90%
Enjoy a low variable rate with no ongoing fees and borrow up to 90% of the value of the property.
3.52%
3.54%
$0
$0 p.a.
80%
A basic home loan with a competitive rate and low fees.
3.58%
3.58%
$0
$0 p.a.
70%
A low interest rate home loan with no application or ongoing fees.
3.58%
3.59%
$0
$0 p.a.
80%
A competitive variable rate product with no application or valuation fees offered by a 100% online lender.
3.54%
3.58%
$0
$0 p.a.
80%
A variable rate home loan with competitive rate, redraw facility and offset account.
3.74%
3.74%
$0
$0 p.a.
80%
Pay no application fee or ongoing fees with this loan.
3.64%
3.67%
$0
$0 p.a.
80%
A low rate home loan with no ongoing fees.
3.68%
3.83%
$0
$10 monthly ($120 p.a.)
80%
A low interest rate home loan that allows borrowers to borrow up to 80% of the property value.
3.77%
3.81%
$200
$0 p.a.
95%
A basic home loan with a low interest rate and a redraw facility available.
3.74%
3.75%
$0
$0 p.a.
80%
A special variable rate home loan with no application or ongoing fees.
3.60%
3.62%
$0
$0 p.a.
80%
Take advantage of a 100% offset account along with no annual or application fees.
3.69%
3.69%
$0
$0 p.a.
80%
Enjoy a low variable interest rate and no application or ongoing fees.
3.69%
3.69%
$0
$0 p.a.
90%
A special limited time offer for owner occupiers. An IMB Transaction Account must be opened with this loan.
3.65%
3.66%
$0
$0 p.a.
90%
A competitive variable rate home loan with no application fee.
3.74%
3.74%
$0
$0 p.a.
90%
A competitive variable rate with a redraw facility. NSW, QLD and ACT residents only.
3.74%
3.76%
$0
$0 p.a.
90%
A home loan with a special rate for owner occupiers. Free offset account.
3.62%
3.62%
$0
$0 p.a.
80%
A discounted, competitive variable rate loan with limited fees.
3.78%
3.78%
$0
$0 p.a.
80%
A basic low-rate home loan that still offers some useful features.
3.74%
3.74%
$0
$0 p.a.
95%
A low rate home loan with no application or ongoing fees. Free home & contents insurance for 1 year. T&Cs apply. Note that to be eligible for this loan you must be QLD resident.
3.74%
3.74%
$0
$0 p.a.
110%
Requires a family member to act as guarantor. Discounted rate available with family pledge loans. Family pledge loans
require no LMI and no deposit. NSW, Qld and ACT only.
3.97%
3.97%
$0
$0 p.a.
90%
A competitive variable rate home loan with no ongoing fees.
3.89%
3.91%
$0
$0 p.a.
80%
Package your owner-occupied loan with your investment loan and enjoy low rates for both.
3.64%
4.03%
$0
$395 p.a.
80%
Apply for a new owner occupier loan or refinance from another lender and receive this discounted rate.
3.99%
4.02%
$0
$0 p.a.
80%
An investment loan with a competitive interest rate and no ongoing fees.
3.99%
4.00%
$0
$0 p.a.
80%
A low-fee variable rate investor loan with a fast online application process.
3.96%
3.98%
$350
$0 p.a.
90%
Take advantage of a redraw facility, competitive variable rate and no application or settlement fees for a limited time.
4.19%
4.59%
$0
$395 p.a.
90%
Enjoy all the benefits of a full-featured package investment loan, including a 100% offset account.
3.72%
4.19%
$0
$0 p.a.
80%
Enjoy a variable rate with the Bankwest Equaliser Home Loan.
3.74%
4.15%
$0
$395 p.a.
80%
Enjoy a discount of a competitive interest rate and 100% offset account.
4.17%
4.21%
$600
$0 p.a.
95%
A competitive no frills home loan. 350K NAB Rewards Points offer available. Terms and conditions apply.
3.73%
3.73%
$0
$0 p.a.
70%
A special low variable rate for owner occupiers with 100% offset account and no application or ongoing fees.
3.97%
4.02%
$445
$0 p.a.
90%
Get a competitive rate without features you may not use.
3.99%
3.99%
$395
$0 p.a.
80%
A flexible low-rate variable home loan that lets you combine your loan with other financial products.
4.09%
4.11%
$0
$0 p.a.
80%
A low variable rate loan with no application or ongoing fees.
3.74%
4.57%
$445
$0 p.a.
90%
A two year discounted rate which reverts to an ongoing life of loan discount afterwards.
4.57%
4.94%
$0
$395 p.a.
95%
No application fee and 100% offset account.
3.68%
3.69%
$0
$0 p.a.
95%
A no frills loan with a competitive rate and a maximum LVR of 95%.
3.64%
3.78%
$0
$10 monthly ($120 p.a.)
80%
A competitive variable rate home loan with flexible features. You can earn 30,000 Velocity Points for every $100k you borrow (for a limited time, subject to eligibility requirements).
3.79%
3.80%
$0
$0 p.a.
80%
A competitive rate with no ongoing monthly fees or application fees.
3.69%
3.71%
$0
$0 p.a.
90%
A discounted interest rate home loan with no monthly fees.
3.68%
3.69%
$0
$0 p.a.
90%
Get a low variable rate along with some important basic features.

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How do variable home loans work?

 

Watch: Should I get a fixed or variable rate loan?

A variable rate home loan has an interest rate which can fluctuate as your lender responds to economic factors such as the cost of funding, the Reserve Bank of Australia's official cash rate decisions each month and more. This means over the course of a year, your home loan rate (and your periodic repayments) might increase or decrease. In Australian history, variable interest rates have seen highs of around 17%, and lows around 3%.

Learn why interest rates change.

Variable rate home loans contrast with fixed rate home loans, where you enter into an agreement with your lender for a predetermined period of time, usually between one to five years, during which your interest rate won't change. There are also mixtures of variable rate and fixed rate home loans known as split rate loans, and these allow you to split your home loan into two or more portions and allocate variable or fixed rates to each portion.

Pros and cons of a variable rate home loan

In general, variable rate home loans have advantages and disadvantages you should be aware of.

Pros

  • Features. Many variable rate home loans come with useful features, such as the ability to make additional repayments, offset accounts and redraw facilities. These features are not offered in abundance with fixed-rate loans.
  • Easy to refinance. When you opt for a variable rate loan, you have the flexibility to refinance with another lender in order to secure a more competitive deal. With a fixed rate product, however, you would need to pay high discharge fees to exit the loan early.
  • Falling interest rates. A variable rate home loan provides you with the ability to benefit from falling interest rates, which are typically passed on to variable rate customers. Even a 0.25% rate reduction could make a big difference to your periodic repayments.

Cons

  • Interest rate rise. An interest rate rise on a variable rate home loan would make your repayments more expensive, and could make it more difficult to service your loan.
  • Difficult to budget. If your rate is fluctuating regularly, it can be difficult to plan an accurate budget. You might have less money to allocate to other expenses if your home loan repayment rises.

How do I compare variable rate loans?

Couple talking with a brokerComparing a variable rate home loan should take into account a range of factors, including:

  • Interest rate. Interest rates will impact your repayments, so ensure you choose an interest rate which will result in a repayment you can manage. It's also a good idea to use a repayment calculator to find out what your repayments will look like with the given interest rate, and also add an extra 1% on top of this to see what your repayments would be should interest rates rise. This will help you prepare and manage your interest rate risk.
  • Fees. A variable rate home loan can come with a range of fees, including upfront application fees or ongoing fees, as well as fees to use features including offset accounts or redraw facilities. Ensure that the fees justify the interest rate and features you'll receive with the loan. This is why you should always pay attention to a loan's comparison rate, which takes into account its interest rate and fees and expresses them as a percentage.
  • Features. What features you choose to add to your comparison will depend on how you want to use your home loan. If you prefer to have your salary paid into your home loan to minimise your interest charged, you might want to look for an offset account. If you want a home loan that allows you to make unlimited additional repayments, you might want to look for home loans with a free redraw facility.
  • Eligibility. Different lenders will put limitations on what types of properties they will finance and the types of borrowers they will accept. Ensure the loans you're comparing are available for your situation, including the type and size of the property, your income source and your loan purpose.

Should I go with a variable home loan?

There's no definitive answer to this. Many borrowers want the flexibility and competitive interest rate that comes with a variable loan. But others prefer knowing exactly what their repayments will be every month for a set period. Fixed rates are easier to budget for. Whatever your choice, you need to make some kind of prediction about the future of interest rates. If rates are low and likely to rise soon, fixing your rate could be a wise move. But if you think rates could go lower, or at least stay where they are, a variable rate might give you more options and lower repayments. You're also not stuck with your choice. You can always refinance your home loan if your rate jumps up.

Types of variable rate home loans

There are a number of variable rate home loans on offer.

If you're looking for a more specialised type of variable home loan like some of the ones listed above, you should consider contacting a mortgage broker to get some free, expert guidance.

Frequently asked questions about variable rate home loans

Choosing the right type of mortgage is complex. Here are few more specific questions and scenarios that might be relevant to you.

Compare more home loan options here

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Home Loan Offers

Important Information*
loans.com.au Essentials - Variable (Owner Occupier, P&I)

A competitive interest rate home loan with interest only options. Interest rate 3.52%p.a.
comp rate of 3.54%p.a.

Tic:Toc Live in Loan Variable Rate - Principal & Interest

A competitive variable rate product with no application or valuation fees offered by a 100% online lender.

NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I) First Home Buyer Special

A special rate for first home buyers buying residential property and borrowing over $150K. 350K NAB Rewards Points offer available. Terms and conditions apply.

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16 Responses

  1. 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.

    • Staff
      MariaOctober 17, 2017Staff

      Hi Safia,

      You may want to check out lenders on this page on Construction Loans.

      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

  2. 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

    • Staff
      LiezlAugust 3, 2017Staff

      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. You may find our guide on home loan refinancing on this page helpful.

      Cheers,
      Liezl

  3. 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?
    Thanks
    Carol

    • Staff
      MarcJune 20, 2016Staff

      Hi Carol,
      thanks for the question.

      This will depend on the lender, as each will have their 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,
      Marc.

  4. Default Gravatar
    JonSeptember 30, 2014

    Hi, how do i search for interest only loans?

    • Staff
      ShirleyOctober 1, 2014Staff

      Hi Jon,

      Thanks for your question.

      Please see this page for a comparison of interest free home loans.

      For future reference, you can use the search tool (with the magnifying glass) on the top right hand corner of this page to search for certain comparisons.

      Cheers,
      Shirley

  5. Default Gravatar
    JeffAugust 19, 2014

    My bank charges 5.98% variable rate , am I in my right to ask for a better rate like other lenders are give. We have a offset account and does that make difference.

    • Staff
      MarcAugust 20, 2014Staff

      Hi Jeff,
      thanks for the question.

      You’re completely within your rights to ask for a better rate, and starting a comparison of what else is out there in the market already is a great place to start. If you let your lender know that you’re unhappy with your rate and thinking of refinancing, there’s a range of incentives they can offer for you to stay, including cash and decreased rates. It never hurts to ask.

      I hope this helps,
      Marc.

  6. Default Gravatar
    MeganJuly 11, 2014

    If I choose a variable loan am I locked into that loan for a certain amount of time or can I opt out or change my loan whenever I choose???

    • Staff
      ShirleyJuly 14, 2014Staff

      Hi Megan,

      Thanks for your question.

      It usually depends on the home loan you’ve committed to. Some lenders could charge a break fee if you leave the loan early and some may not charge this fee when you’ve stayed with the loan for a certain period of time.

      You can check these fees by clicking on the ‘fees’ tab on our home loan reviews, and you can check the PDS of the product to see how long you may need to commit to the loan.

      Generally variable rate home loans are more flexible than fixed rate home loans in terms of exiting – best of luck!

      Cheers,
      Shirley

  7. Default Gravatar
    kateAugust 6, 2013

    my home has just been valuaterd at 800000
    what is the most i can borrow and best interest rate

  8. Default Gravatar
    jkJune 26, 2013

    i want to take combination of fixed and variable home loan for 30 yrs. loan amount over $350000.

    what is the maximum period for fixed rate i can opt for in this scheme. i want to split amount in 50 – 50 %.

    thanks and regards

    jk

    • Staff
      ShirleyJune 26, 2013Staff

      Hi Jk,

      Thanks for your comment.

      After you’ve chosen a loan that you think might be suitable for you, our review will state the maximum period that you can fix or split your interest rate.

      Cheers,
      Shirley

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