One of the most popular Australian home loans in the market, the interest rate in a standard variable home loan can vary throughout the term of the loan, as it depends on the interest rate set by the Australian Reserve Bank. If interest rates fall, your home loan repayments will come down, However, if the interest rates increase, so will your monthly home loan repayments.
Most borrowers prefer a standard variable home loan because they are the most flexible home loan available and offer a range of features, such as a redraw facility, repayment frequency flexibility, portability, the ability to make extra repayments without penalty, line of credit, offset accounts, redraw facilities and the flexibility to split your home loan.
Advantages of a Standard Variable Home Loan
Disadvantages of a Standard Variable Home Loan
You should seek pre approval before entering into a Standard Variable Loan arrangement. The reason is simple, building is a complex excerise requiring good co ordination and technical skills.
Lenders are aware of the complexity owner builders face, and the possibility of costs over runs. This comes primarily from in-experience with managing this type of project. Hence most lenders are not generous when it comes to lending at high LVR’s on a Standard Variable Loans.
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