Best Variable Home loan Rates From 5.54%

Lender	Home Loan	Interest Rate	Comparison Rate*	Monthly Repayment	Repayment type	Rate Type	Ongoing Fees	Upfront Fees	LVR	Tags	Features	Link	Compare
Up	Up Home Variable (Principal & Interest) (LVR ≤ 90)	5.90%p.a.	5.90%p.a.	$2,373	Principal & Interest	Variable	$0	$0	90%	Featured	Up is 100% owned by Bendigo Bank. Up to 50 offset accounts New joiners get $10 by signing up to the app using code UPHOMEYM. (T&Cs apply)	More details	Compare
loans.com.au	loans.com.au Variable Basic Cashback Home Loan (Principal and Interest) (LVR < 70%)	6.04%p.a.	6.06%p.a.	$2,408	Principal & Interest	Variable	$0	$530	70%	Featured Online ExclusiveUp to $4k cashbackINCLUDES NOV RBA RATE INCREASE	Immediate cashback upon settlement $2000 for loans up to $700,000 $4000 for loans over $700,000	More details	Compare
Unloan	Unloan Variable Rate Home Loan – Refinance Only	5.74%p.a.	5.65%p.a.	$2,332	Principal & Interest	Variable	$0	$0	80%			More details	Compare
WLTH	WLTH Ocean Owner Occupied (Amounts < $1m, LVR < 60%)	5.94%p.a.	6.01%p.a.	$2,383	Principal & Interest	Variable	$0	$887	60%			More details	Compare
loans.com.au	loans.com.au Variable Home Loan (LVR < 90%)	6.04%p.a.	6.06%p.a.	$2,408	Principal & Interest	Variable	$0	$530	90%	4.5 STAR CUSTOMER RATINGSINCLUDES NOV RBA RATE INCREASE	Low rates for purchase and refinancing Simple online application process No fees, unlimited redraws, 0.10% offset	More details	Compare
HSBC	HSBC Home Value Home Loan (Principal and Interest) (LVR < 60%)	5.99%p.a.	5.99%p.a.	$2,396	Principal & Interest	Variable	$0	$150	60%			More details	Compare
Heritage Bank	Heritage Bank Discount Variable Home Loan ($150k+) (LVR < 70%)	5.99%p.a.	6.01%p.a.	$2,396	Principal & Interest	Variable	$0	$210	70%			More details	Compare
Greater Bank	Greater Bank Great Rate Variable Home Loan (New Customers) (NSW, ACT & QLD only) (LVR < 80%)	5.99%p.a.	6.00%p.a.	$2,396	Principal & Interest	Variable	$0	$180	80%			More details	Compare
Reduce Home Loans	Reduce Home Loans Rate Cutter Home Loan (LVR < 60%)	5.99%p.a.	6.06%p.a.	$2,396	Principal & Interest	Variable	$0	$920	60%			More details	Compare
P&N Bank	P&N Bank & Basic Home Loan (LVR < 60%)	6.09%p.a.	6.10%p.a.	$2,421	Principal & Interest	Variable	$0	$0	60%			More details	Compare
Suncorp Bank	Suncorp Bank Personal Purpose Back to Basics Special (Principal and Interest) (LVR ≤ 60%) (New Customer)	6.13%p.a.	6.14%p.a.	$2,432	Principal & Interest	Variable	$0	$600	60%			More details	Compare
ANZ Plus	ANZ Plus Variable Home Loan (Principal and Interest)	6.14%p.a.	6.15%p.a.	$2,434	Principal & Interest	Variable	$0	$0	80%			More details	Compare
Macquarie Bank	Macquarie Bank Offset Package Home Loan (Principal and Interest) (LVR 70%-80%)	6.20%p.a.	6.45%p.a.	$2,450	Principal & Interest	Variable	$248	$350	80%		$0 application fee Fast turnaround times Estimate your borrowing power in as little as 1 minute	More details	Compare
Athena	Athena Straight Up Variable Home Loan (Interest Only) (LVR < 80%)	6.49%p.a.	6.40%p.a.	$2,163	Interest-only	Variable	$0	$0	80%			More details	Compare
Commonwealth Bank	Commonwealth Bank Wealth Package Variable Home Loan (Principal and Interest) (LVR < 60%)	6.49%p.a.	6.87%p.a.	$2,526	Principal & Interest	Variable	$395	$200	60%			More details	Compare
NAB	NAB Base Variable Home Loan (Principal and Interest) (New Customer)	6.84%p.a.	6.88%p.a.	$2,618	Principal & Interest	Variable	$0	$0	95%			More details	Compare
Westpac	Westpac Flexi First Option Home Loan (New Customer) (LVR > 80%)	6.84%p.a.	7.16%p.a.	$2,726	Principal & Interest	Variable	$0	$0	95%			More details	Compare
ANZ	ANZ Standard Variable Home Loan (Principal and Interest) (LVR < 80%)	7.24%p.a.	7.24%p.a.	$2,726	Principal & Interest	Variable	$0	$160	80%			More details	Compare
Great Southern Bank	Great Southern Bank Offset Variable Owner Occupier Interest Only (LVR ≤ 70%)	7.24%p.a.	6.55%p.a.	$2,413	Interest-only	Variable	$0	$835	70%			More details	Compare
Commonwealth Bank	Commonwealth Bank Extra Home Loan (Interest Only) (LVR < 80%)	7.25%p.a.	6.95%p.a.	$2,417	Interest-only	Variable	$0	$200	80%			More details	Compare
Homeloans.com.au	Homeloans.com.au Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 95%)	7.29%p.a.	7.29%p.a.	$2,740	Principal & Interest	Variable	$0	$0	95%	NO UPFRONT OR ONGOING FEES		More details	Compare
Suncorp Bank	Suncorp Bank Personal Purpose Back to Basics Special (Principal and Interest) (LVR 90%-95%) (New Customer)	7.34%p.a.	7.34%p.a.	$2,753	Principal & Interest	Variable	$0	$600	95%			More details	Compare
Bendigo Bank	Bendigo Bank Complete Home Loan Owner Occupied Variable (LVR > 90%)	7.39%p.a.	7.61%p.a.	$2,767	Principal & Interest	Variable	$15	$250	95%			More details	Compare
Newcastle Permanent	Newcastle Permanent Premium Plus Package Variable Rate Home Loan Special (Interest Only) (LVR 80%-90%)	7.44%p.a.	7.45%p.a.	$2,480	Interest-only	Variable	$395	$0	90%			More details	Compare
Great Southern Bank	Great Southern Bank Basic Variable Owner Occupier Interest Only (LVR 80%-90%)	7.44%p.a.	6.83%p.a.	$2,480	Interest-only	Variable	$0	$835	90%			More details	Compare
Pepper	Pepper Essential Home Loan (Prime) (Principal and Interest) (LVR 75%-80%)	7.44%p.a.	7.62%p.a.	$2,780	Principal & Interest	Variable	$10	$599	80%			More details	Compare

What is a variable home loan rate?

A variable rate home loan is a home loan where your interest rate will move up or down over the loan term. Interest rate fluctuations can happen at any time according to the lenders' wishes but they generally occur in line with changes to the official cash rate, which is set by the Reserve Bank of Australia (RBA). For example, if the official cash rate falls, it’s likely your lender will drop their home loan interest rates as well (and vice versa if the official cash rate rises).

Variable rate home loans can be more difficult to budget for than a fixed loan because you have to take into account potential rate rises or falls, which will impact your repayment amount.

How do you compare variable rates?

You can find which variable-rate home loans offer the maximum savings and lowest cost by using the comparison rate.

The comparison rate of a variable-rate home loan reflects the “true cost” of the loan. It considers not just the interest costs but also the other fees embedded into the loan.

While it is easy to point out which home loans have the lowest variable rate, it is still crucial to take note of the comparison rate.

Some home loans have low variable rates but charge higher fees. In such circumstances, it is much better to get a higher variable rate but with minimal fees.

Why choose a variable home loan rate?

In Australia, variable rate home loans are more popular than fixed rate home loans among borrowers.

Variable rate home loans can be more preferable to fixed rate home loans because they offer more flexibility. Variable rate home loans are generally more likely to offer appealing features like a redraw facility, offset account, or the ability to make extra repayments to help you pay off your loan sooner.

Variable rate home loans can be more preferable to fixed rate home loans if the official cash rate is falling as it means there’s a good chance your lender will also drop your home loan interest rate. If you were on a fixed interest home loan, you would miss out on these rate cuts during your fixed term. However, if you’re on a variable rate home loan and the official cash rate rises, it’s likely your lender will also then increase your home loan interest rate - whereas if you were on a fixed rate loan, your rate would stay the same.

Features of variable rate home loans

A variable-rate home loan is a flexible option that allows borrowers to enjoy several loan features. The loan features variable-rate borrowers can enjoy include:

Ability to make extra repayments
Set up an offset account
Access to a line of credit
Create a redraw facility

Types of variable rate home loans

Variable-rate home loans can be classified into several types.

The first type is called the standard variable home loan. This is the most flexible type of variable home loan as it offers the maximum range of optional features that can help you save more in interest costs. However, standard variable home loans often have a higher interest rate.

If you want a no-frills option that bears the lowest interest rate, the basic variable home loan is the one for you. It bears a lower interest rate, which means lower repayments. The major drawback is the lack of features.

Discounted variable rates are the third option — many lenders offer discounts depending on loan size, loan-to-value ratio, or income. Others even provide discounted variable rates depending on whether you are a first-home buyer.

How long do variable rates last?

Variable rates are the default interest rate of home loans. Over the life of the loan, your loan will have a variable interest rate unless you decide to fix it.

Once you have locked in your interest rate, you will now have a fixed-rate, which can last between one to five years before it reverts back to a variable rate.

What causes the rise and fall in variable rates?

Variable rates tend to follow the cash rate target of the RBA. When the cash rate declines, lenders usually pass on the discount to their borrowers. The same goes for instances of cash rate increases.

Lenders can also make out-of-cycle changes to variable rates, depending on situations such as funding issues, regulatory changes, and fluctuations in market conditions.

Frequently Asked Questions

Yourmortgage.com.au helps to answer these frequently asked questions to assist home buyers on finding the best variable home loan rates in the market.

Can I change my mortgage from variable to fixed?

Refinancing from a variable home loan to a fixed loan is much simpler than refinancing from fixed to variable, which can attract hefty break costs and discharge fees.

How often do variable mortgage rates change?

Variable mortgage rates are subject to change at the lenders' discretion but generally fluctuate in line with any changes the Reserve Bank makes to the official cash rate.

Can you pay off a variable home loan early?

You can pay off a variable home loan early by making extra or early repayments, which could potentially save you thousands in interest over the life of the loan. Unlike fixed home loans, you won’t be charged an early exit free for repaying your variable mortgage off early.

Are variable rates higher than fixed rates?

Not necessarily - variable rates can rise or fall depending on what’s happening with the official cash rate, so they may not always be higher than fixed rates. In fact, historically variable rate home loans have generally been lower than fixed, but this has changed a bit over the last few years with interest rates falling to historic lows. If fixed rates are lower than variable rates, it’s likely it means the lender expects rates to remain low for some period.

Is it better to have a fixed or variable home loan?

If interest rates are on the decline, it could make more sense to have a variable interest rate so you can benefit from rate drops. However, if interest rates are currently low but likely to rise in the near future, it could make more sense to lock in that lower rate with a fixed mortgage. Fixing your interest rate can be a bit of a gamble because you’re essentially taking a bet on whether your lender will increase or lower your rate.