Home Loan Options for Adelaide Investors and Families: Standard or Basic Variable Rate Home Loans
Variable rate home loans work best for people who prefer to have flexibility in their mortgage repayments.
Securing a variable rate means you can tailor your loan, to pay off more than the minimum required payment, and add convenient options such as an offset account or split rate.
The interest rate of your variable home loan depends on the market, so as the market rates fluctuate, your interest rates may follow.
If the market rates fall, your minimum repayment can decrease.
A lower interest rate can decrease the overall amount that you have to pay off your loan, if you choose to keep your repayments the same.
If there is an increase in market rates, your minimum repayment may also increase.
Variable home loan rates come in either standard or basic options, so you can chose the solution that works best for your situation.Book a FREE appointment with a professional mortgage broker now!
Standard variable loan
Borrowers who want the option of paying off their mortgage quickly may prefer the standard variable loan option.
There is no penalty on this type of variable loan if you wish to pay off the mortgage earlier than planned.
A feature of the standard variable rate loan is an offset account. This is a transaction account that is linked to your loan so that any credit is offset against your loan balance, reducing the payable interest in your mortgage.
Another benefit of organising a variable home loan rate is the option to redraw funds, or split your loan to take advantage of a partial fixed rate and a partial variable rate.
Basic variable loan
Borrowers looking for a loan with a cheaper interest rate but no features such as redraw or an offset account may prefer the basic variable loan option.
A basic variable home loan which generally has a considerably lower interest rate is best for those who want to pay off a consistent amount over the full term of the loan, with regular Monthly or Fortnightly repayments.
Basic variable home loans are best for people who wish to only make minimum payments, and are not interested in features like an offset account or loan-splitting that are available with a standard variable rate home loan.
Variable rate home loan drawback
The one major aspect of a variable rate home loan that is important to understand is the possibility that your minimum repayments may increase.
If market interest rates raise, your minimum repayment requirements will as well, which will affect your budget.
This applies whether you have a standard or basic variable loan.
For those who are simply not interested in this kind of market sensitivity in their loan, another mortgage option such as a fixed rate home loan may suit them better.
Are you interested in getting a variable rate home loan?
If either the flexible standard variable loan or the basic variable loan sounds like it may be the best mortgage solution for you, talk to AAA Mortgage Solutions today.
We can help you assess your situation and tailor a mortgage product to best fit your unique home loan needs, whether that is a variable rate loan or another loan solution.
Phone AAA Mortgage Solutions now to arrange a chat, on 1300 555 888.