Queensland Variable Rate Home Loans

Related Categories: Home Loans, Introductory Rate Home Loans, Construction Home Loans, Fixed Rate Home Loans, Bridging Loans, Low Doc Home Loans, Line of Credit

Variable Rate Home Loans

When it comes to getting the right mortgage for your home, there are a number of choices that are available depending on a number of factors. Two of the more popular types of mortgages are fixed rate and variable rate. Each type has its advantages, but what exactly are variable rate home loans and how do they work in Australia?

What are Variable Rate Home Loans?

A variable rate means that the interest rates for your loan will change depending on the national lending rate and they offer more flexibility than their fixed rate counterparts. For many Australians, there are certain advantages that going with a variable rate loan offers, particularly when it comes to saving money assuming that the lending rates remain low.

While a fixed rate loan is set for roughly three to five years, a variable rate mortgage means that the interest rates may change after the loan has been signed. The Australian industry cash rate is what sets the interest level for the loan and many take advantage of the rates when the interest levels are very low.

However, there are some considerations that need to be made before jumping on a low interest variable rate loan.

The Risks and Rewards of Variable Rate Home Loans

This particular type of loan is certainly a very popular choice, especially when the lending rates are so low. This is particularly true when it comes to comparing the terms offered by different lenders who will often sweeten the loan with features such as the option to make extra repayments on your own schedule and redraw facilities that add to the flexibility as well.

However, the danger is that your repayment rate is subject to the fluctuations of the market which means that it makes it more difficult to budget. While the advantage is that if rates fall you will pay less, the problem becomes what happens when the rates rise. Even a small shift in the interest rate may mean hundreds, if not thousands of dollars over the course of the loan.

This is why many lending experts recommend that you allow for a 2% shift in the interest rate when taking out a variable rate home loan. While 2% may be a little extreme given the past several years of stability, predicting economic forces several years out can be difficult as there are many unforeseen factors. However, do have the option to split your loan over variable and fixed rates to provide more stability or simply go with a fixed rate loan for now and secure the next few years.

The more you learn about variable rate home loans, the better off you will be when it comes to getting a long-term loan to purchase property. For many Australians, the variable rate loan offers more advantages in terms of flexibility and the possibility of actually paying less on your monthly rate. However, that will have to be weighed by the possibilities of having the interest rates rise over the time of your loan as well.

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Railways Credit Union Limited

Brisbane Central Station Concourse
Ground Floor, RC2, Plaza Level Central Station
Brisbane, Queensland 4001
Australia

Railways Credit Union Limited - Offers loans, insurances and saving accounts.

The Capricornian Ltd

Stockland Rockhampton,Yaamba Road
Shop 23
Rockhampton, Queensland 4700
Australia

The Capricornian Ltd - Offers loans, insurances, saving accounts and financial planning.

Warwick Credit Union Ltd

101 Palmerin Street
Warwick, Queensland 4370
Australia

Warwick Credit Union Ltd - Offers loans, insurances, savings accounts and financial planning.

Zar Mortgage Brokers

825 Zillmere Rd
Suite 1, Level 2
Aspley, Queensland 4034
Australia

Zar Mortgage Brokers offers various types of home loans.

Ocean Home Loans Pty Ltd

21 Port Jackson Blvd
Clear Island Waters, Queensland 4226
Australia

Ocean Home Loans mortgage brokers specialize in all types of residential home loans, investment loans & construction loans.

Mortgage Loans Australia Pty Ltd

2 Innovation Parkway
Level 2, ‘Regatta Building
Birtinya, Queensland 4575
Australia

Mortgage Loans Australia Pty Ltd offers various types of home loans.

Green Light Home Loans

23 Thuringowa Drive
Kirwan, Queensland 4817
Australia

Green Light Home Loans offers mortgage and finance broker services.

Astute Financial

136 Mulgrave Road
Cairns, Queensland 4870
Australia

Astute Financial offers mortgage and finance broking services in Cairns.

Smarter Mortgage Solutions

221 Lyons Street
Cairns, Queensland 4870
Australia

Smarter Mortgage Solutions offers a wide range of home loans.

DLV Finance

155 East Street
Rockhampton, Queensland 4700
Australia

DLV Finance offers home loans, equipment finance, business loans, cattle leasing and rural loans in Rockhampton, Emerald and Bundaberg.

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