Variable
Variable Interest Rate Home
Loans
Variable
Variable loans are ones where the interest rate
varies with time. Variable loans can be repaid either
interest only where the principal remains the same or
principal and interest, where the outstanding balance
reduces as the loan is repaid.
There are three types of
variable loans:
- Standard Variable: This is your "normal " home
loan with a variety of features depending on the
lender. They tend to have a lot of options available
such as credit cards, ability to make extra payments
or withdrawals, B Pay, etc. A standard variable loan
can be considered to be "fully optioned". Several
lenders offer "Professional Packs" which provide
significant interest rate discounts and lower or no
application fees. These discounts usually apply for
loans over a minimum size, e.g $200,000.
- Basic Variable: Basically this a "no frills"
version of the standard variable and tends to be at
least 0.5 % cheaper. A good choice for those wanting
to get rid of their mortgage as quickly as possible.
- Discount Variable: This is a variety of standard
variable that has an introductory or "honeymoon" rate
for an initial period of the loan. After this initial
period the "honeymoon " rate reverts to the standard
variable.
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