Standard Variable Home Loan

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

• If interest rates drop, repayments might drop
• Big savings when the rates are low
• You can make additional payments without penalty
• Additional repayments can usually be taken back or redrawn by you
• This product is flexible, for example, it allows borrowers to make extra repayments off the home loan principal without incurring any penalties. It can also provide you with the option to re-draw additional funds paid off the loan principal
• Wide choice of home loan features, including a line of credit, offset account or cheque account

Disadvantages of a Standard Variable Home Loan

• When interest rates rise, so do your repayment
• This type of home loan usually attracts a higher interest rate than basic home loans