Standard Variable Home Loans are the most common type of mortgage product. For borrowers, this type of home loan offers more features and benefits, including some or all of the following:

  • It can be combined with other Home Loan products to provide a more cost effective package of banking services
  • Redraw facility, allowing you greater flexibility of payment options
  • Extra Repayments without penalty, which can save money on interest
  • Access to a Line of Credit

Variable rate home loans carry higher interest than a basic home loan, because of the extra features.

 

Advantages of a Standard Variable Rate Home Loan

  •  Choice of Repayments – Can be monthly, fortnightly or weekly
  •  Redraw Facility – Most institutions (subject to terms and conditions) will allow you to withdraw any surplus funds you have above the minimum repayment
  •  Offset accounts – This is an account linked to the home loan account which allows you to use the account balance to decrease the amount of interest charged to your home loan account.  A 100% Mortgage Offset Account uses every $ in your account to offset the balance of your loan.
  •  Extra repayments – You can make lump sum repayments or pay more than the minimum repayment without charges.

Why would I not choose a Standard Variable Rate Home Loan ?

  • Higher interest rate then your normal basic, low interest home loan
  • Monthly loan repayments can increase due to interest rate changes
  • You may not need the extra features, and cost is your primary consideration. See Basic Home Loans

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