Variable rate home loans offer flexibility and the potential to benefit from interest rate decreases over time. At Intuitive Finance, we help you navigate the advantages and considerations of variable rate home loans, ensuring you find the best option for your financial needs.
What are Variable Rate Home Loans?
A variable rate home loan is a type of home loan where the interest rate can change over time. This means that if interest rates decrease, you could pay less interest on your loan balance, potentially reducing your overall loan cost. Variable rate home loans offer the flexibility to adapt to market changes, making them a popular choice for many borrowers.
Types of Variable Rate Home Loans
Basic Variable Rate Home Loan
Basic variable rate home loans generally have fewer features than standard variable loans and often come with a lower interest rate. This type of loan is ideal for those who are cost-focused and prefer a straightforward loan without the additional flexibility and options that standard variable loans offer.
ADVANTAGES
- Low Interest Rate: Enjoy relatively low interest rates.
- Extra Repayments: Make additional repayments whenever possible.
- Redraw Facility: Often includes a redraw facility.
DISADVANTAGES
- Limited Features: May lack the features and flexibility of other variable loans.
- No Offset Account: Generally do not include an offset account.
Standard Variable Rate Home Loan
A standard variable-rate home loan has a variable interest rate that serves as a benchmark for other variable-rate products offered by lenders. This type of loan typically includes various features, such as an offset account and redraw facility, providing more flexibility. However, due to the additional features, it often has a higher interest rate compared to basic variable-rate loans.
ADVANTAGES
- Flexibility: Make lump-sum payments without penalties.
- Lower Repayments: Benefit from reduced repayments if interest rates fall.
- Extra Features: Often includes features like an offset account.
DISADVANTAGES
- Higher Repayments: Your repayments will increase if interest rates rise.
What’s Involved in Obtaining a Commercial Loan Through Intuitive Finance?
Initial Meeting
A 1-hour session to establish your financial and lifestyle goals, discuss the fact-finding document, and agree on a timeline for its return.
Fact Finding Submission
We will submit the completed fact-finding document.
Strategy Submission
Within 5 days of receiving the completed fact-finding, a written strategy is submitted to you.
Document Lodgement
Within 2 days of agreeing to proceed, documents are lodged with the institution.
Conditional Approval
Expect conditional approval within 1 to 3 days of lodgement.
Unconditional Approval
Expect unconditional (full) approval within 2 to 4 days after conditional approval.
Loan Documents Arrival
Expect loan documents to arrive within 2 to 5 days after unconditional approval.
Loan Settlement
Expect loan settlement within 3 to 5 days after submitting the signed loan documents.
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