HSBC Variable Rate Home loan

A variable rate loan without any ongoing fees lets you concentrate on paying your mortgage quicker

The HSBC Variable Rate Home Loan is a simple and cost effective mortgage solution with no ongoing fees. It provides you with a range of value adding features that allow tailored loan management and repayments to suit your needs. HSBC also offer a fixed rate loan, so if you would like the certainty of fixed repayments for the life of the fixed rate term, you may want to consider comparing their fixed rate product with similar fixed rate offerings in the market.

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Review by

Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206) and a Tier 1 Generic Knowledge certification (RG 146).

Expert review

This loan can be used for a variety of purposes. It's available to personal borrowers looking to buy their first home and investors who want to expand their portfolio. This loan can also be used to purchase a vacant block of land or the purchase of a new dwelling. Borrowers who are waiting on the sale of a property can also use this loan as a form of bridging finance. During the bridging period, borrowers pay the interest component of the loan only.

The HSBC Variable Rate Loan is fully portable. This means if you decide to sell your property and buy again, you can keep the same loan.

About this loan

What are the features and benefits of the HSBC Variable Rate Home Loan?

In addition to no ongoing fees, this loan offers a range of features aimed at helping you manage your mortgage. Flexible repayment options and the ability to redraw funds gives you the ability to quickly reduce your mortgage debt, while also offering the security to redraw on additional repayments should the need arise. Features of the HSBC Variable Rate Home Loan include:

  • Loan amount: Borrowers have the option of borrowing a minimum of and a maximum of for a period of up to 30 years. The maximum LVR for this loan is for both owner occupiers and investors. If this loan is taken as a low doc option then the maximum LVR is 70% without lender's mortgage insurance (LMI) or 80% with LMI. The minimum and maximum that can be borrower as a low doc loan is $100,000 and $1,500,000 respectively.
  • Additional repayments: Borrowers have the option paying above the required minimum repayment each month, fortnight or week. If you pay just a small amount over the minimum repayment, it can make a big difference to the overall cost of the loan. Unlike some other lenders, HSBC will penalise borrowers for paying extra onto their mortgage.
  • Redraw facility: If you've made additional repayments on to your mortgage, you're able to make use of this loan's redraw facility. Borrowers are free to redraw up to the amount they've paid extra onto their mortgage. It should be noted that there is a small fee of each time a borrower access their redraw facility through internet banking.
  • Flexible repayments: HSBC offers borrowers the ability to pay both the interest and the principal components of the loan or interest only repayments. Interest only repayments give borrowers repayment relief if they need to direct the funds elsewhere; however, the loan size will not be reduced during the interest only term, only the interest repayments are being covered. Interest only repayments can be made for a period of up to three years and repayments must be made monthly.
  • Repayment frequency: Borrowers have the option of making repayments every week, fortnight or every month. By scheduling your mortgage repayments to match when you're paid, you can effectively manage your disposable income.
  • Splitting option: This loan allows you split your interest calculations between a fixed and variable rate of interest. This gives borrowers the ability to hedge their loan against negative interest rate fluctuations in the market. When rates go down, repayments on the variable portion of the loan will also decrease. Conversely, if rates go up, the variable repayments will also increase; however, the fixed portion of the loan will stay the same in both circumstances. Borrowers receive the option to split their loan at establishment free of charge.

HSBC Variable Rate Home Loan fees

  • Establishment fee: $600. This fee is for the set up of your loan accounts with HSBC.
  • Settlement fee: $150. This fee is charged upon the settlement of your loan.

There are other fees that are specific to a range of circumstances, refer to the terms and conditions for a detailed explanation of the HSBC Variable Rate Home Loan fee schedule.

How to apply

If you're interested in applying for the HSBC Variable Rate Home Loan or you want more information click enquire and reach out to a mortgage broker. Alternatively you can go the HSBC website and contact the lender directly.

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