Compare variable rate home loans
- Compare variable rate home loans from a range of providers based on rates, fees and features.
Variable home loan rates compared
The table below shows a selection of variable owner-occupied home loan rates (based on principal & interest repayments) for a $600,000 loan with monthly repayments. The table is sorted by lowest interest rate.
| Lender | Product | Interest Rate | Comparison Rate | Repayments | Features | Exit Fees | Upfront Fees | Ongoing Fees |
|---|---|---|---|---|---|---|---|---|
Auswide Bank | Basic Home Loan Owner Occupier | 5.89% | 5.91% | Ongoing Repayments: $3,555.00 1 Year Interest Payable: $35,139.00 2 Year Interest Payable: $69,823.00 3 Year Interest Payable: $104,024.00 Total Interest Payable: $679,793.00 Total Amount to be Repaid: $1,280,746.00 | Extra Repayment: No Offset: No Partial Offset: No Redraw: No Repayment Holiday: No Splitting: No Maximum LVR - with LMI: N/A | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $300.00 Legal/Solicitor Fee : $303.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
Adelaide Bank | Connective Select - Variable Home Loan | 6.13% | 6.16% | Ongoing Repayments: $3,648.00 1 Year Interest Payable: $36,580.00 2 Year Interest Payable: $72,707.00 3 Year Interest Payable: $108,352.00 Total Interest Payable: $713,137.00 Total Amount to be Repaid: $1,313,960.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 95% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $299.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $199.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
Qudos Bank | No Frills Home Loan | 6.14% | 6.14% | Ongoing Repayments: $3,651.00 1 Year Interest Payable: $36,640.00 2 Year Interest Payable: $72,827.00 3 Year Interest Payable: $108,532.00 Total Interest Payable: $714,535.00 Total Amount to be Repaid: $1,314,835.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 80% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
ING | Orange Advantage | 6.14% | 6.43% | Ongoing Repayments: $3,651.00 1 Year Interest Payable: $36,640.00 2 Year Interest Payable: $72,827.00 3 Year Interest Payable: $108,532.00 Total Interest Payable: $714,535.00 Total Amount to be Repaid: $1,324,778.00 | Extra Repayment: Yes Offset: Yes Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 95% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $499.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $299.00 Valuation Fee: $225.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $299.00 Annual Package Fee: $0.00 |
Suncorp | Back to Basics Home Loan | 6.14% | 6.14% | Ongoing Repayments: $3,651.00 1 Year Interest Payable: $36,640.00 2 Year Interest Payable: $72,827.00 3 Year Interest Payable: $108,532.00 Total Interest Payable: $714,535.00 Total Amount to be Repaid: $1,314,885.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 95% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $150.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
uBank | Neat Variable | 6.14% | 6.16% | Ongoing Repayments: $3,651.00 1 Year Interest Payable: $36,640.00 2 Year Interest Payable: $72,827.00 3 Year Interest Payable: $108,532.00 Total Interest Payable: $714,535.00 Total Amount to be Repaid: $1,315,085.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: Yes Repayment Holiday: Yes Splitting: No Maximum LVR - with LMI: N/A | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $250.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
Macquarie Bank | Offset Home Loan Package | 6.30% | 6.54% | Ongoing Repayments: $3,714.00 1 Year Interest Payable: $37,601.00 2 Year Interest Payable: $74,751.00 3 Year Interest Payable: $111,419.00 Total Interest Payable: $736,981.00 Total Amount to be Repaid: $1,345,534.00 | Extra Repayment: Yes Offset: Yes Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 95% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $350.00 Legal/Solicitor Fee : $363.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $110.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
St George Bank | Basic Home Loan | 6.39% | 6.40% | Ongoing Repayments: $3,749.00 1 Year Interest Payable: $38,142.00 2 Year Interest Payable: $75,833.00 3 Year Interest Payable: $113,044.00 Total Interest Payable: $749,679.00 Total Amount to be Repaid: $1,350,129.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: Yes Repayment Holiday: Yes Splitting: Yes Maximum LVR - with LMI: 95% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $100.00 Valuation Fee: $0.00 Additional Valuation Fee: $164.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
Bank Of Melbourne | Basic Home Loan | 6.39% | 6.40% | Ongoing Repayments: $3,749.00 1 Year Interest Payable: $38,142.00 2 Year Interest Payable: $75,833.00 3 Year Interest Payable: $113,044.00 Total Interest Payable: $749,679.00 Total Amount to be Repaid: $1,350,129.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: Yes Repayment Holiday: Yes Splitting: Yes Maximum LVR - with LMI: 95% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $100.00 Valuation Fee: $0.00 Additional Valuation Fee: $164.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
Bank SA | Basic Home Loan | 6.39% | 6.40% | Ongoing Repayments: $3,749.00 1 Year Interest Payable: $38,142.00 2 Year Interest Payable: $75,833.00 3 Year Interest Payable: $113,044.00 Total Interest Payable: $749,679.00 Total Amount to be Repaid: $1,350,129.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: Yes Repayment Holiday: Yes Splitting: Yes Maximum LVR - with LMI: 95% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $100.00 Valuation Fee: $0.00 Additional Valuation Fee: $164.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
Bankwest | Complete Variable Home Loan | 6.44% | 6.82% | Ongoing Repayments: $3,769.00 1 Year Interest Payable: $38,442.00 2 Year Interest Payable: $76,434.00 3 Year Interest Payable: $113,947.00 Total Interest Payable: $756,755.00 Total Amount to be Repaid: $1,369,395.00 | Extra Repayment: Yes Offset: Yes Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 95% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $250.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $40.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $395.00 |
Resimac | Resimac Prime (Flex) | 6.49% | 6.80% | Ongoing Repayments: $3,908.00 1 Year Interest Payable: $40,545.00 2 Year Interest Payable: $80,645.00 3 Year Interest Payable: $120,270.00 Total Interest Payable: $806,720.00 Total Amount to be Repaid: $1,416,320.00 | Extra Repayment: Yes Offset: Yes Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 95% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $0.00 Valuation Fee: $330.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $299.00 |
Firstmac | Offset | 6.54% | 6.58% | Ongoing Repayments: $3,808.00 1 Year Interest Payable: $39,043.00 2 Year Interest Payable: $77,637.00 3 Year Interest Payable: $115,753.00 Total Interest Payable: $770,954.00 Total Amount to be Repaid: $1,372,574.00 | Extra Repayment: Yes Offset: Yes Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 90% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $200.00 Settlement Fee: $300.00 Valuation Fee: $220.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
Bluestone | Connective Elevate Prime - Full Doc | 6.59% | 6.64% | Ongoing Repayments: $3,828.00 1 Year Interest Payable: $39,343.00 2 Year Interest Payable: $78,239.00 3 Year Interest Payable: $116,656.00 Total Interest Payable: $778,077.00 Total Amount to be Repaid: $1,379,437.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: N/A | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $590.00 Legal/Solicitor Fee : $400.00 Settlement Fee: $120.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
ANZ Bank | Simplicity PLUS | 6.64% | 6.65% | Ongoing Repayments: $3,848.00 1 Year Interest Payable: $39,644.00 2 Year Interest Payable: $78,840.00 3 Year Interest Payable: $117,559.00 Total Interest Payable: $785,215.00 Total Amount to be Repaid: $1,385,725.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 90% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $160.00 Valuation Fee: $150.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $50.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
AMP | AMP Essential Home Loan | 6.64% | 6.66% | Ongoing Repayments: $3,848.00 1 Year Interest Payable: $39,644.00 2 Year Interest Payable: $78,840.00 3 Year Interest Payable: $117,559.00 Total Interest Payable: $785,215.00 Total Amount to be Repaid: $1,386,800.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 90% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $295.00 Settlement Fee: $0.00 Valuation Fee: $900.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
Commonwealth Bank | Standard Variable Rate | 6.69% | 7.07% | Ongoing Repayments: $3,868.00 1 Year Interest Payable: $39,944.00 2 Year Interest Payable: $79,442.00 3 Year Interest Payable: $118,463.00 Total Interest Payable: $792,368.00 Total Amount to be Repaid: $1,404,783.00 | Extra Repayment: Yes Offset: Yes Partial Offset: No Redraw: Yes Repayment Holiday: Yes Splitting: Yes Maximum LVR - with LMI: 95% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $200.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $395.00 |
MA Money | MA Money Prime Full Doc | 6.69% | 6.76% | Ongoing Repayments: $3,868.00 1 Year Interest Payable: $39,944.00 2 Year Interest Payable: $79,442.00 3 Year Interest Payable: $118,463.00 Total Interest Payable: $792,368.00 Total Amount to be Repaid: $1,393,568.00 | Extra Repayment: Yes Offset: Yes Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 90% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $500.00 Legal/Solicitor Fee : $400.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
AXIS | Axis Origin Standard Variable | 6.79% | 6.84% | Ongoing Repayments: $3,908.00 1 Year Interest Payable: $40,545.00 2 Year Interest Payable: $80,645.00 3 Year Interest Payable: $120,270.00 Total Interest Payable: $806,720.00 Total Amount to be Repaid: $1,408,014.00 | Extra Repayment: Yes Offset: Yes Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: No Maximum LVR - with LMI: N/A | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $194.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $0.00 Valuation Fee: $305.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $395.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
NAB | NAB Base Variable Rate Home Loan | 6.84% | 6.88% | Ongoing Repayments: $3,928.00 1 Year Interest Payable: $40,845.00 2 Year Interest Payable: $81,247.00 3 Year Interest Payable: $121,174.00 Total Interest Payable: $813,918.00 Total Amount to be Repaid: $1,414,868.00 | Extra Repayment: Yes Offset: Yes Partial Offset: No Redraw: Yes Repayment Holiday: Yes Splitting: Yes Maximum LVR - with LMI: N/A | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $600.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
Yellow Brick Road | Essentials Prime Full Doc | 7.09% | 7.12% | Ongoing Repayments: $4,028.00 1 Year Interest Payable: $42,348.00 2 Year Interest Payable: $84,257.00 3 Year Interest Payable: $125,695.00 Total Interest Payable: $850,133.00 Total Amount to be Repaid: $1,451,165.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 95% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $402.00 Settlement Fee: $0.00 Valuation Fee: $330.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
Resi | Essentials Prime Full Doc | 7.09% | 7.12% | Ongoing Repayments: $4,028.00 1 Year Interest Payable: $42,348.00 2 Year Interest Payable: $84,257.00 3 Year Interest Payable: $125,695.00 Total Interest Payable: $850,133.00 Total Amount to be Repaid: $1,451,165.00 | Extra Repayment: Yes Offset: Yes Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 95% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $402.00 Settlement Fee: $0.00 Valuation Fee: $330.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
Pepper Money | Pepper Essential (Full Doc) | 7.14% | 7.33% | Ongoing Repayments: $4,048.00 1 Year Interest Payable: $42,648.00 2 Year Interest Payable: $84,859.00 3 Year Interest Payable: $126,600.00 Total Interest Payable: $857,420.00 Total Amount to be Repaid: $1,462,449.00 | Extra Repayment: Yes Offset: Yes Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: N/A | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $599.00 Legal/Solicitor Fee : $330.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $10.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
La Trobe | Full Doc Residential - A | 7.24% | 7.50% | Ongoing Repayments: $4,198.00 1 Year Interest Payable: $44,827.00 2 Year Interest Payable: $89,223.00 3 Year Interest Payable: $133,155.00 Total Interest Payable: $910,332.00 Total Amount to be Repaid: $1,517,667.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 95% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $0.00 Valuation Fee: $305.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $15.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
Westpac | Rocket Repay Home Loan | 7.54% | 7.86% | Ongoing Repayments: $4,212.00 1 Year Interest Payable: $45,053.00 2 Year Interest Payable: $89,677.00 3 Year Interest Payable: $133,840.00 Total Interest Payable: $916,224.00 Total Amount to be Repaid: $1,528,424.00 | Extra Repayment: Yes Offset: Yes Partial Offset: No Redraw: Yes Repayment Holiday: Yes Splitting: Yes Maximum LVR - with LMI: 95% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $395.00 |
How does a variable rate home loan work?
The interest rate on a variable rate home loan can go up or down over time. This means your mortgage repayments will be lower when interest rates drop but higher when interest rates rise.
Variable rate home loans generally offer more flexibility to borrowers than fixed-rate loans do. For example, most variable home loans allow extra repayments so you can pay off your mortgage faster and come with features that can save you on interest over time.
The majority of owner-occupier loans in Australia have a variable interest rate, according to the RBA.
Types of variable home loan products
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Basic variable home loan: A no-frills home loan product with limited features but a lower interest rate. For example, a basic home loan may have a discount of 0.10% p.a., compared to a lender’s other products with no offset account or redraw.
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Introductory discount home loan: Offers a discounted (honeymoon) interest rate for a period of time, and then reverts to a higher variable rate.
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Standard variable home loan: This is the most common type of variable home home, as it offers all the standard features you’d expect (e.g. offset, redraw) at a standard variable rate. A lender’s standard variable rate is often used as the default interest rate that applies when a borrower’s fixed-rate term ends.
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Package home loan: Allows you to package your home loan with your transaction account and other financial products, like credit cards, in exchange for a discounted interest rate or reduced fees on each product.
Variable rate home loan features
Offset
An offset account is a transaction account linked to your home loan that helps you save on interest. That’s because money saved in your offset account directly offsets (reduces) the balance of your home loan that interest is charged on. This reduces your interest payable.
Additional repayments
Most variable rate home loans allow you to make additional repayments without penalty fees. This makes it easier to pay down your loan faster and save on interest.
Redraw facility
Allows you to withdraw any additional repayments you've made on your home loan. It frees up cash and provides flexibility in managing finances.
Flexible repayments
You can choose your repayment frequency (e.g. weekly, fortnightly, or monthly) or opt for an interest-only repayment option for a period of time.
Portability
This feature allows you to transfer your existing loan to a new property if you decide to sell and buy a new home.
Split loan
You can split your home loan into fixed and variable portions, balancing stability and flexibility.
How to compare variable home loans
1. Compare the advertised rate
The advertised rate is the initial interest rate lenders promote, which is a good starting point to estimate your monthly repayments. Your actual individual rate may be different depending on your loan-to-value ratio (LVR) and loan amount. A lower interest rate means lower repayments and less interest paid in total. Even a 0.10% difference in your rate could save you thousands of dollars on your home loan.
Here’s an example:
Interest rate | Loan amount |
|---|---|
| 5.50% | $600,000 |
| 5.60% | $600,000 |
Interest rate | Loan term |
| 5.50% | 30 years |
| 5.60% | 30 years |
Interest rate | Monthly repayments |
| 5.50% | $3,406.73 |
| 5.60% | $3,444.47 |
Interest rate | Interest over the life of the loan |
| 5.50% | $626,424 |
| 5.60% | $640,011 |
Interest rate | Difference over the life of the loan |
| 5.50% |
|
| 5.60% |
| Interest rate | 5.50% | 5.60% |
|---|---|---|
Loan amount | $600,000 | $600,000 |
Loan term | 30 years | 30 years |
Monthly repayments | $3,406.73 | $3,444.47 |
Interest over the life of the loan | $626,424 | $640,011 |
Difference over the life of the loan |
|
2. Check the comparison rate too
The advertised interest rate doesn’t give the full picture. Lenders must also show a comparison rate. This estimates the cost of a home loan, including fees as well as interest. It’s designed to offer a more accurate comparison across different lenders and products. However, the comparison rate is always calculated by lenders based on a $150,000 loan amount and a 25-year term which won’t be realistic for all borrowers.
3. Consider home loan fees
Home loan fees can potentially offset any savings you make on interest, so it’s important to consider how they will impact your bottom line. Most lenders charge standard fees to open and maintain your home loan account and additional fees like redraw fees, late payment fees, early termination, etc. You can often negotiate with your lender to have some of these waived.
4. Choose the right home loan features for your needs
Choose a variable loan with features that will help you save interest on your home loan and pay it off faster. Look for an offset account, additional repayments option, and redraw facility as the bare minimum.
What is a good interest rate on a variable home loan?
The best variable home loan rates will be different depending on the type of home loan you need (owner-occupier or investor) and what your LVR is. This is why comparing loans based on your own situation is important.
But to give you an idea of what’s available right now:
- The lowest variable home loan rate on Money’s database is: 5.89% (comparison rate 5.91%)
- The average variable home loan rate on Money’s database is: 6.58%
How is variable interest calculated?
Lenders usually use this formula to calculate interest:
- Your home loan balance is multiplied by your interest rate, and divided by 365 (days) to calculate your daily interest.
- Your daily interest totals each day in a month are added together to arrive at the monthly interest amount.
- This monthly interest is then used to determine your repayment based on your chosen frequency (e.g. weekly, fortnightly, or monthly).
For a home loan of $600,000 with an interest rate of 6.00% p.a. and monthly repayments, the calculation might look like this:
- 600,000 x 0.06 / 365 = 98.63 in daily interest
- $98.63 x 30 days = $2,958.90 in monthly interest
Your interest payable reduces each month as your home loan balance reduces, assuming your interest rate stays the same.
Fixed rate vs variable rate: Which is better?
The interest rate and repayments on a variable rate home loan fluctuate over time, while a fixed home loan has a fixed rate and repayments for a period of time (1-5 years typically).
Choosing whether you should go variable or fixed will depend on your financial situation, current market conditions, and what lenders are offering at any given time.
You may choose a variable rate home loan when:
- Rates are expected to drop in the near future
- You want access to home loan features to pay your mortgage off faster
- You want the option to refinance without incurring fees
You may choose a fixed rate home loan when:
- Rates are historically low or increasingly volatile, and you want to lock in your current rate
- You value the certainty of a fixed repayment amount more than getting the absolute lowest rate
- You don’t plan to refinance within the fixed term (or you’ll incur break costs)
“One thing you can bet on is that the banks have already priced in which way they think the market is headed into their fixed rate. They’re hoping borrowers will fix their rate purely based on wanting peace of mind. The best time to fix is when the market is not so volatile, and banks offer a great rate close to the variable. When the gap between the fixed rate and variable rate is too large, I would choose variable."
Mansour Soltani, Money.com.au's home loan expert
Variable rate home loan pros & cons
Pros | Your repayments decrease with rate cuts |
|---|---|
| Cons | Your repayments may increase if rates go up |
Pros | Freedom to make additional repayments and redraw |
| Cons | The unpredictability of variable rates can make it hard to budget or manage repayments |
Pros | Access to features that can help you save money on your home loan (e.g. offset) |
| Cons | Economic conditions dictate how much interest you’ll pay each month and over the life of the loan |
Pros | Easier to refinance with no break fees |
| Cons | You may feel the need to re-evaluate your home loan more often to ensure you’re on a competitive rate |
| Pros | Cons |
|---|---|
Your repayments decrease with rate cuts | Your repayments may increase if rates go up |
Freedom to make additional repayments and redraw | The unpredictability of variable rates can make it hard to budget or manage repayments |
Access to features that can help you save money on your home loan (e.g. offset) | Economic conditions dictate how much interest you’ll pay each month and over the life of the loan |
Easier to refinance with no break fees | You may feel the need to re-evaluate your home loan more often to ensure you’re on a competitive rate |
FAQs about variable rate home loans
Who’s eligible for a variable rate home loan?
You can choose a variable rate on most owner-occupier and investor home loan products. The minimum eligibility requirements include:
- Australian citizenship or permanent residency (or married or in a de facto relationship with an Australian citizen or permanent resident)
- You must be over 18 years of age
- Meet the lender’s minimum income threshold
- Have a deposit or equity to contribute towards the purchase of the home
- A good credit score
How do I know if interest rates are going to rise or fall?
It can be difficult to predict which way rates will go as it depends on various economic factors like the inflation rate, employment figures, and the overall performance of the economy, to name a few. Historical trends can provide some indication but aren’t accurate predictors of future rate movements. It’s best to pay attention to statements from the Reserve Bank of Australia (RBA) or get advice from your mortgage broker or home loan specialist.
Can I switch from fixed to variable?
Switching to a variable interest rate will happen automatically after your fixed rate expires. You can switch to a variable home loan (or split your home loan) before your fixed term ends, but you may incur break costs.
Can I pay off a variable rate home loan early?
Yes, you can generally make additional repayments and pay off your variable rate home loan early without penalty. It will depend on the lender and the terms of your contract.
Shopping around for the right loan can save you thousands of dollars in interest and fees.
Home Loans guides and resources
What's the next step on your property journey? Our home loan guides will help you navigate the road ahead, whether you're buying, building or looking to save on an existing loan.
Written by
Senior Finance Writer
Megan Birot
Reviewed by
Home Loans Expert
Mansour Soltani
AS FEATURED IN
