Variable home loan rates from 1.89%
Compare variable home loan rates
Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 22, 2022. View disclaimer.
Variable More details FEATUREDUNLIMITED REDRAWSSPECIAL OFFER Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)
Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)
Variable More details FEATUREDAN EASY DIGITAL APPLICATION Neat Variable Home Loan (Principal and Interest) (LVR < 60%)
Neat Variable Home Loan (Principal and Interest) (LVR < 60%)
Variable More details FEATURED100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)
Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)
Variable More details ZERO APPLICATION FEESFEE FREE OFFSET Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)
Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)
Variable More details NO APPLICATION FEES Yard Home Loan (Principal and Interest) (Special) (LVR < 80%)
Yard Home Loan (Principal and Interest) (Special) (LVR < 80%)
Variable More details NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY. Variable Home Loan (Principal and Interest)
Variable Home Loan (Principal and Interest)
Variable More details $0 APPLICATION FEE Budget Home Loan (Principal and Interest) (LVR < 80%)
Budget Home Loan (Principal and Interest) (LVR < 80%)
Variable More details 100% FULL OFFSET ACCOUNT Offset Package Home Loan (Principal and Interest) (LVR < 60%)
Variable More details NO UPFRONT OR ONGOING FEES Owner Occupier Accelerates - Evaporate (LVR 60%-70%) (Principal and Interest)
Variable More details FEATUREDGREAT INTEREST RATE Smart Booster Investor Bundle (Principal and Interest)
Smart Booster Investor Bundle (Principal and Interest)
Variable More details NO UPFRONT OR ONGOING FEES Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 80%)
Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 80%)
Variable More details UNLIMITED EXTRA REPAYMENTS Basic Home Loan (Principal and Interest) (LVR < 60%)
Variable More details THE MORE YOU PAY THE LOWER YOUR RATE Owner Occupier Accelerates - Liberate (LVR 70%-80%) (Principal and Interest)
Variable More details GREAT FLEXIBLE LOAN OPTIONS Basic Home Loan (Principal and Interest) (LVR 70%-80%)
Variable More details BUNDLE YOUR HOME LOAN AND YOUR INVESTMENT LOAN FOR MORE SAVINGS Yard Investor Bundle Loan (Bundled with Home Loan)
Variable More details FEATUREDGET A FULL OFFSET ACCOUNT FOR NO EXTRA COST Low Rate Home Loan - Prime (Principal and Interest) (Investment) (LVR < 60%)
Low Rate Home Loan - Prime (Principal and Interest) (Investment) (LVR < 60%)
Variable More details FEATUREDGET A DISCOUNTED GREEN RATE* Green Home Loan (Principal and Interest)
Green Home Loan (Principal and Interest)
Variable More details FEATUREDLIMITED TIME OFFER Smart Booster Home Loan Discounted Variable - 1yr
Smart Booster Home Loan Discounted Variable - 1yr
What is a variable rate home loan?
A variable rate home loan is a home loan where your interest rate will change with the market. This means your interest rate can rise or fall over the term of your loan. These home loans usually come with features that allow you to pay off your loan sooner like extra repayments or offset accounts.
Why should you get a variable interest rate?
In Australia, most home loan borrowers have a variable interest rate on their mortgage as opposed to a fixed-rate. Variable interest rates can move up or down at any time, but they generally move in sync with Australia’s cash rate, which is controlled by the Reserve Bank (RBA). For example, when the cash rate is cut, there’s a good chance your lender will also cut the interest rates on its variable home loans, which could include the interest rate you’re paying. Conversely, your interest rate can rise if a lender decides to increase rates, so variable rates can be a blessing and a curse.
Variable-rate loans might be preferable to fixed-rate loans if you think interest rates are going to fall. But when lenders expect a future cash rate cut, some may offer some tantalisingly-low fixed rates to tempt more people into fixing their home loan rate. If you were to go with a fixed-rate, you’ll miss out on any rate cuts over your fixed-term. Remember that lenders normally have a good idea of which way interest rates are moving, and price their home loans accordingly.
Variable loans also tend to be more flexible than fixed-rate home loans, with many offering appealing features like offset accounts, redraw facilities and the ability to make extra repayments. Such features can help you to save on interest and pay off your loan earlier.
Check out our page on current interest rates to see what the RBA cash rate is when you're reading this, as this can give you a good idea of whether rates are likely to be increased or decreased any time soon.
Interest-only vs principal and interest
There are generally two types of home loan repayment which we’ve shown in the tables above: principal and interest and interest-only.
Interest-only (IO) loans delay the repayment of the borrowed amount on the loan, also known as the principal. If you borrow $400,000 for a $500,000 house, that $400,000 is the principal. With an interest-only loan, you only have to pay the interest on that principal for a set period of time, normally up to five or 10 years depending on the lender.
This can make interest-only loans much cheaper during the interest-only period, as a significant portion of your overall repayments are missing. This makes them popular with investors too, as the interest component of home loan repayments are tax-deductible as an investment expense.
But as you can see in our example below, IO loans can be more expensive overall, since you still have to repay that initial principal, just in a shorter period of time. This means your repayments after the expiry of the interest-only period will usually be much higher.
The table below shows the difference in monthly and total repayments of an IO and P&I home loan, based on a 30-year loan of $400,000 at an interest rate of 3.00% p.a.
|
|
Loan amount |
Monthly repayment during IO period |
Monthly repayment after IO period |
Total cost (principal & interest) of the loan |
|---|---|---|---|---|
|
P&I loan |
$400,000 |
N/A |
$1,686 |
$607,109 |
|
IO loan |
$400,000 |
$1,000 |
$1,897 |
$629,054 |
|
Total cost difference |
N/A |
N/A |
+$211 |
+$21,945 |
Calculations made via Savings.com.au's Interest-Only Home Loan Calculator.
Interest-only home loans could be summed up as ‘less now, more later’.
Savings.com.au’s two cents
Why pay extra tens of thousands because you can’t be bothered to switch to or find a cheaper home loan? Look around for a good rate – there are plenty of them out there so there’s no reason to not spend a small amount of time comparing loans or even checking in with a mortgage broker.
You can also keep up with the latest home loan rate movements by checking our home loan news page.
Frequently Asked Questions
One of the easiest ways to compare variable home loan rates is by using a home loan comparison table, which you’ll find on this website. With a comparison table, the rates and features of a number of different home loans are clearly visible in one place. From here, you could choose to do some further research by going to the lender’s website and learning more about the home loan’s specific features.
When comparing variable interest rates it’s important that you look at both the advertised rate and the comparison rate, because the comparison rate is designed to reflect the home loan’s extra costs, such as upfront and ongoing fees. A home loan with a low advertised rate but a high comparison rate is likely to come with high fees.
An attractive perk of using a variable rate home loan is the flexibility that’s available to you. Unlike fixed rate home loans, many variable rate home loans allow you to make unlimited extra repayments. This can help you pay off your home loan faster, which means that you’ll likely save on interest charges over time. Additionally, some variable rate home loans will come with features like an offset account, redraw facility, flexible repayment schedules, ability to pay off the loan early without fees, ability to refinance without breaking your agreement, and more.
If you have a variable rate home loan, you can pay it off early by making extra or early repayments. Paying off your variable rate home loan early means you'll save money on interest, and you won't be slapped with early break fees.
Variable rate home loans can vary depending on the lender. Some lenders will offer features like an offset account, while others may only allow you to make extra repayments. Some offset accounts will be 100% offset accounts, while others may only be 50% offset accounts. Ultimately, while a variable interest rate works the same way in principle, the rate itself may be different between lenders as well as the mortgage’s accompanying features.
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