Variable Rate Home Loans
Home loans with variable interest rates are usually the most competitive rates and they're easier to refinance. Compare offers from 3.09%.
UBank Home Loan Offer
Apply for the UBank UHomeLoan Variable Rate and get a low rate plus no upfront or ongoing fees as well as unlimited redraws.
- Interest rate of 3.09% p.a.
- Comparison rate of 3.09% p.a.
- Application fee of $0
- Maximum LVR: 80%
- Minimum borrowing: $200,000
Compare variable rate mortgages from across the market
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A variable interest rate can change whenever the lender decides to raise or lower it. Lenders might lower the rate to attract customers or because their home loan funding costs have decreased. They may raise rates if their costs go up.
But in reality lenders aren't moving their variable rates up and down every week. And on average, variable rate mortgages tend to be cheaper than fixed rates. It's also easier to exit a variable home loan because there are no breaking costs (unlike with a fixed rate).
Variable rate mortgages are far more popular with Australian borrowers, taking up almost 80% of the home loan market (according to research from Mortgage Choice).
Fixed versus variable rates explained
The difference between fixed and variable mortgage rates boils down to stability versus flexibility. It's easier to get out of a variable home loan and refinance to another one. Here's a summary of the differences:
|Variable rates||Fixed rates|
Variable loans are more likely to have features like redraw and offset accounts, although this really depends on the product.
How do I compare variable rate loans?
Consider the following factors when comparing variable home loan rates:
- Interest rates. A lower interest rate means lower repayments. It's the most important aspect of a home loan. Use a repayment calculator to find out what your repayments will look like with the given interest rate.
- 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?
- Features. If you will actually use them, a variable loan's features can be useful. If you have extra savings you might want a loan with 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.
- Product types. Most variable rate loans are either basic or full-featured. A basic variable rate loan is usually a lender's most competitive rate but the mortgage may not have features like offset accounts or redraw facilities. More full-featured loans with offset accounts often have higher rates (but not always). There are also package loans that are combined with a credit card and savings account from the same lender and introductory or honeymoon rates, which start very low but will go higher later.
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.
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Take advantage of a low-fee mortgage with a special interest rate of just 3.09% p.a. and a 3.09% p.a. comparison rate.
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