If you're searching for a variable rate home loan, you're not alone. They're Australia's most popular type of mortgage and account for over 75% of all home loans. The beauty of variable rate loans is that they offer so much flexibility to tailor a mortgage to suit individual needs.
Savvy can help you compare the best home loan interest rates so you can choose a variable loan that fits in neatly with your lifestyle. Start the comparison process today to help you get your home loan application underway sooner.
Benefits of variable rate loans
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Competitive interest rates
You can compare the very best loan deals around to help maximise your chances of finding a great low variable interest rate on your home loan
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Take advantage of interest rate decreases
You can take advantage of drops in your lender’s interest rate to help you potentially save thousands on the total interest you pay on your mortgage.
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Be spoilt for choice with so many loans on offer
The number of variable rate home loans in the market has ballooned in recent years, with a vast range of loans to choose from with many lenders competing for your business.
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Choose your loan term and repayment frequency
There’s a variety of ways to reduce the interest you pay on your loan, including offset accounts and redraw options which also add greater flexibility to your loan.
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Access additional features
Quick cash loans can be tailor-made to your requirements regarding how much you need and the time you need to pay it back
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No early exit fees
The right loan for you today may not be the perfect one for you in five years’ time, but with no early exit fees on your variable rate loan, you have the choice to refinance with no nasty surprises.
Types of home loans
Why apply for a home loan with Savvy
Variable rate loan features explained
Additional repayments
If you’re the type of borrower who would be disciplined enough to contribute above the minimum, you can potentially save thousands in interest and shave years off your loan.
Offset account
If you don’t think you’ll have any additional funds to deposit in an offset account, you shouldn’t pay extra for a feature you won’t use.
Redraw options
Whilst no one can predict the future, or a sudden unexpected need for funds, you should think about whether you’d use a redraw in such an emergency.
Ability to fix or split a portion of your loan
This option gives you the continued flexibility of a variable interest rate home loan, but also the ability to lock in a portion of your mortgage at a low rate.
Flexibility to refinance
That’s why having no exit fees on your variable rate home loan gives you the flexibility you need to refinance to a loan that better suits your changing lifestyle.
Top tips for securing the best variable rate home loan
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Save as large a deposit as you can
This can save you money in several ways. The larger deposit you save up, the less you need to borrow, so you’ll save by having a smaller mortgage to start with. Lenders can also offer cheaper interest rates to people with larger deposits, and if you can offer more than 20% of the value of your house as a deposit, you’ll also avoid paying Lenders Mortgage Insurance (LMI), which could save you thousands of dollars more.
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Do your research with Savvy
Getting stuck with a home loan that doesn’t meet your needs can be an expensive mistake. It’s important to do your research before deciding which loan and lender are right for you, but you can leave much of the comparison legwork to us. Savvy will help you shortlist the best variable rate home loan deals currently available in Australia tailored to your needs. Compare across all the factors which matter most to you.
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Give yourself a flexible budget
Because repayments on variable rate loans will change over the coming months and years, it’s important to give yourself some wiggle room when you’re planning your home loan budget. Don’t leave yourself so tight on cash that you’ll be unable to make your loan repayments if interest rates suddenly go the wrong way and you find yourself with larger monthly repayments. A safe rule of thumb is to only spend 30% of your income on your variable rate mortgage repayments.
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Pay off your loan as soon as you can
The longer you have a loan, the more it will cost you in interest. Since your variable rate home loan may come with the option to make extra repayments, take advantage of this feature and opt for larger instalments over a shorter loan period (provided you can afford to). If you do have extra cash at the end of your pay cycle, consider putting this on your loan as an additional repayment too, which can save you thousands over the life of your loan.
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Keep an eye out for better deals
It’s important to remember that if the Reserve Bank reduces interest rates, all lenders decide if they will pass this reduction onto their customers. Some may only pass on a portion of the rate cut, while others will pass on 100% of the decrease. Since you have the flexibility to change lenders, it pays to keep an eye out for the best variable rate deals possible, so don’t be afraid to ask your lender to pass on rate cuts and be prepared to swap lenders if they don’t.
