Standard Variable Rate Home Loan
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What is a Variable Rate Home Loan?With variable rate home loans the interest rate varies according to market forces but is normally several percentage points higher than the current Reserve Bank interest rate. When the Reserve Bank changes official rates then variable rates from other lenders follow suit. Interest Rates can move up or down.
The Variable rate home loan is the most common form of loan in Australia and is normally a principal and interest type loan, but can be interest only. Equity, Renovation, Low Doc, No Deposit, Debt Consolidation, Investment and First Home Loans are just other names for Variable Rate Loans. However as many of the loan titles suggest, the eligibility criteria is different for each.
Standard Variable loans include features that give the borrower flexibility in management and repayments - see below.
Basic variable loans are usually the cheapest loan on the market in terms of interest rates. However this doesn't always mean they are the cheapest loan as there may be extra charges like monthly account fees, and they often don't have many of the useful features of the standard loan.
Standard Variable Rate Loans are still a major part of the mortgage market as they have been for many years because of their flexibility and features.
Standard Variable Rate Loans
Features of Standard Variable Rate LoansProbably the main advantage of variable rate loans is that there is no penalty in paying the loan off quicker by making additional payments.
Important now that interest rates are dropping again is that if there is a reduction in official interest rates, your repayments also reduce.
Other useful features can include offset accounts, a split loan facility, redraw facility, direct salary crediting, portability and repayment options.
Benefits of Standard Variable Rate Loans
Tips and strategies
Example Rates and FeesVariable Rate Home Loan NO FEES (June 2016):
*Based on $200,000 Loan over 25 years.
You can apply over the Internet and ask FSO for a free no-obligation quote on a Standard Variable Rate Loan.
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Thank you for visiting our Standard Variable Rate Loan web-page. We hope the overview has proved useful.
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