Rate Type

There are lots of home loan interest rate options for first home loans, next home loans or refinancing. So how do you find one that fits your unique needs and goals? Save time, stress and confusion and let us do all the work.

Below are the most popular types of home loan interest rates. We can explain how different loans may fit your needs and goals. We’ll  also handle the negotiations, legwork and paperwork all the way to settlement.

The basic interest rate on a home loan product is known as the standard variable rate. It can move up and down, based on many factors. This choice is about whether you are comfortable with your loan repayments fluctuating with interest rate movements.  There are often advantages to variable loans, like being able to:

  • Make extra repayments and pay your loan off faster
  • Access extra repayments if you need to.

While lenders use the Reserve Bank of Australia (RBA) monthly target ‘cash rate’ as a guide, they don’t always change their own rate to follow the RBA rate. Depending on how much you borrow you can get a discount on the standard variable rate. We can negotiate this with the lender.

This means your interest rate is set for an agreed period of time – typically from one to five years. Fixed rates protect you against interest rate rises during this time, so they help with budgeting in the first few years of your loan. On the other hand, you usually can’t vary or make extra repayments on fixed loans. And there are costs if you cancel the loan before the fixed term is up. Clients who select a fixed rate ensure a consistent monthly repayment amount allowing ease of budgeting, so should rates move up your repayment will not be affected for a period of time. These days fixed rate loans are not as restricted as they once were, where many lenders allow some principal payments to be made without penalty, although in most cases penalties still exist should you pay out the entire loan whilst still in the fixed period. Also, most lending institutions have little if any difference in interest rates between an investor and owner-occupier loan.

Also known as a “honeymoon rate” for new clients (First Home Buyers) so they can start off with low repayments.

This is a discounted interest rate that:

  • Is usually valid for the first 12 months of your loan
  • Helps you pay off more of your loan faster
  • Protects you against interest rate rises during that time
  • Can have high fees if you cancel during or just after the initial period.

Some introductory rate loans revert to the standard variable rate after the introductory period, but some revert to a cheaper rate.

If the certainty of a fixed rate appeals to you, but you’d also like some flexibility, you might consider a split loan. This means you can fix part of the loan and maintain the rest at the variable rate.


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