Find and compare variable rate home loans

Sort By
Advertised Rate

2.84%

Variable

Comparison Rate*

2.46%

Company
Athena Home Loans
Repayment

$710

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.96

/ 5
Go to site
More details
Advertised Rate

3.39%

Variable

Comparison Rate*

3.59%

Company
Pepper
Repayment

$1,484

monthly

Features
Redraw facility
Offset Account
Borrow up to 85%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.03

/ 5
Go to site
More details
Advertised Rate

2.55%

Variable

Comparison Rate*

2.60%

Company
CUA
Repayment

$1,353

monthly

Features
Redraw facility
Offset Account
Borrow up to 90%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.10

/ 5
Go to site
More details
Advertised Rate

2.84%

Variable

Comparison Rate*

2.68%

Company
Athena Home Loans
Repayment

$710

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.96

/ 5
Go to site
More details
Advertised Rate

3.29%

Variable

Comparison Rate*

3.71%

Company
NAB
Repayment

$823

monthly

Features
Redraw facility
Offset Account
Borrow up to 90%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.46

/ 5
Go to site
More details
Advertised Rate

2.29%

Variable

Comparison Rate*

2.36%

Company
Reduce Home Loans
Repayment

$1,314

monthly

Features
Redraw facility
Offset Account
Borrow up to 75%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.57

/ 5
Go to site
More details
Advertised Rate

2.74%

Variable

Comparison Rate*

2.74%

Company
UBank
Repayment

$1,382

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.76

/ 5
Go to site

Winner of Best investment home loan, RateCity Gold Awards 2021

More details
Advertised Rate

2.68%

Variable

Comparison Rate*

2.73%

Company
Heritage Bank
Repayment

$1,373

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.14

/ 5
Go to site
More details
Advertised Rate

2.29%

Variable

Comparison Rate*

2.23%

Company
Athena Home Loans
Repayment

$1,314

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.63

/ 5
Go to site
More details
Advertised Rate

2.69%

Variable

Comparison Rate*

2.69%

Company
NAB
Repayment

$1,375

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.96

/ 5
Go to site
More details
Advertised Rate

2.49%

Variable

Comparison Rate*

2.56%

Company
Reduce Home Loans
Repayment

$1,344

monthly

Features
Redraw facility
Offset Account
Borrow up to 75%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.23

/ 5
Go to site
More details
Advertised Rate

2.64%

Variable

Comparison Rate*

2.59%

Company
Athena Home Loans
Repayment

$1,367

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.81

/ 5
Go to site
More details

Learn about variable home loans

What is a variable rate home loan?

Variable home loans in Australia are a mortgage repayment type, in which a lender charges interest based on the official cash rate set by the Reserve Bank of Australia (RBA). These popular home loans offer plenty of financial flexibility compared to fixed rate loans.

Whether you're buying a new home, making a property investment, or refinancing your existing home loan, armed with all the information you need in one place, you can make an informed decision about which variable home loan is right for you. 

Variable home loan features

Mortgages with variable interest rates often offer flexible repayment terms, which can include features that provide further financial flexibility.

These include:

  • Offset account – a savings or transaction bank account that is linked to your mortgage. As well as serving as a typical bank account of its kind, any money paid into an offset account is included when your lender calculates the interest owing on your mortgage.
  • Redraw facility - this feature can help encourage you to minimise your home loan’s interest. A redraw facility allows you to withdraw any surplus balance you’ve paid onto your loan, subject to your lender’s terms and conditions.
  • Extra repayments - Some home loans may not allow you to make additional repayments on your mortgage without charge. By making extra repayments onto your mortgage, you may be ahead of schedule and come closer to making an early exit from the home loan, reducing the total interest repayments you’d make.
  • Packages - Some lenders will package its home loans with other financial products, like credit cards, transaction accounts or a line of credit. 

Keep in mind that choosing a home loan with features like the above may result in higher ongoing fees and costs, as well as potentially higher interest rates.  No-frills, basic home loans typically come with low rates, as these features are costly to lenders.

Benefits of a variable rate mortgage

Home loans with variable interest rates can often prove to be quite affordable. Because most lenders base their variable interest rates on the RBA’s official cash rate, if the cash rate falls, your lender may pass this rate discount on to you, potentially lowering your home loan repayments.

Variable rate mortgages also tend to be more flexible than their fixed interest rate counterparts, which are more likely to lock you into set repayment plans with restrictions on making additional repayments. Plus, with a variable rate home loan, you’re more likely to enjoy access to optional bonus features.

Risks of a variable rate mortgage

There are financial risks with every home loan, including variable rate mortgages. If the RBA increases Australia’s official cash rate, your lender will likely pass this rate rise on to you, increasing the cost of your repayments. It’s possible that an extended period of regular interest rate rises could leave you in financial stress, struggling to repay a loan that was once easily affordable.

Split rate loans

If you’d like to limit the impact of rate changes on your home loan, while still enjoying some flexibility, you can consider a loan type that blends the best of both worlds, and split the interest rate on your mortgage between fixed and variable. 

If rates rise, the fixed percentage will help to keep your repayments stable and affordable. And if rates fall, you’ll still enjoy some savings on repayments for the variable loan percentage.

Introductory variable home loans

Another thing to keep in mind is that lenders will often offer lower, introductory variable home loan rates, or honeymoon rates, as special offers to entice new borrowers onto their books. The introductory period may even include perks like fee waivers, cashback offers and more. 

After a set period of time, these introductory rates will then revert to a generally higher standard variable rate. If you choose a home loan offering a low introductory rate, ensure you know not only the exact period of time of this honeymoon period, but also what the lender's standard variable rate is. This way you can consider refinancing to a new, low rate loan once this period has ended if you find the ongoing rate is too high.

How to compare variable rate home loans

To get a better idea of the potential impact that different home loans may have on your finances, look at a home loan's comparison rate. This rate combines each a home loan's advertised interest rate with its standard fees and charges, so you can estimate its average total cost. 

These fees may include upfront fees like application fees, as well as ongoing fees like annual fees, and late payment fees. Check the lender's website for the Product Disclosure Statement, which will outline any potential ongoing fees and costs.

Comparison tables, like the one on this page, can help you compare different comparison rates, as well as view any features. Borrowers can enter their personal details, like the loan amount, ideal loan term and more. This can also be a helpful way for borrowers to compare apples with apples and see not only the potential monthly cost of the loan, but how different home loans compare to one another. 

It's also crucial that you look not only at the rates, but also the potential fees and eligibility criteria set by the lender before you apply. Each lender will have different terms and requirements for approval. You want to ensure you can not only afford a home loan, but that your personal financial situation suits the lender's criteria, so you reduce your risk of loan rejection. 

Loan term length

Most home loans have terms of 25 or 30 years, though shorter and longer home loans are also available.

It’s important to consider how long you want to take to pay off your mortgage, partially because the longer your loan term, the greater the likelihood that your variable interest rate will rise, and bring up your home loan’s repayments with it.

What’s more, the longer your home loan, the more repayments you’ll need to make, each one for a smaller percentage of your loan’s principal. This can help to keep your loan’s monthly cost more affordable, however the increased number of repayments could lead to you paying more interest in total over the lifetime of the loan. 

Further, if you choose an interest-only home loan, you follow a similar path, in that choosing to only pay interest for a set period of time will mean you're not reducing your principal at all in that period. For that reason, many borrowers opt for principal & interest loans to chip away at their loan amount. 

Shorter home loans allow you to get your property fully paid off more quickly by paying a greater percentage of the principal each month. While this can make your repayments more expensive, you’ll likely pay less in total interest over the lifetime of your loan.

Deposit options

You’re often more likely to enjoy lower variable interest rates on your mortgage if you can afford a full deposit on your property. This added security helps to reduce the lender’s risk. The deposit size required for a mortgage varies by lender, though 20 percent of the property value is common.

If you can’t afford a full deposit on the property you want, there may still be home loan options available to you. Some lenders offer mortgages with a high Loan to Value Ratio (LVR), where you pay a smaller deposit and borrow a greater percentage of the property’s value. However, your lender may require you to pay Lender’s Mortgage Insurance (LMI) to keep them protected in case you default on your loan.

Alternatively, you may be able to have a parent or other close relative serve as your guarantor, using the equity in their property to guarantee your home loan in lieu of a deposit. This option can allow you to sidestep LMI, though it may also put the guarantor’s finances at risk if you were to default.

Keep in mind that, depending on your state or territory and whether you're a first home buyer or not, you may have to pay stamp duty on your property. This can range in the tens of thousands of dollars, so factor this potential cost into your deposit budget.

Are variable rates right for you?

While variable rate mortgages may be accessible to first home buyers, the added security offered by fixed rate home loans can often prove appealing to borrowers who are first getting into the property market and want to keep their finances under control while they build up their equity.

Variable rate mortgages often appeal to property investors, because if interest rates stay low, their repayments can remain relatively affordable, allowing buyers to maximise the return on their investment. Plus, access to offset accounts, redraw facilities and the like can help to further minimise interest repayments.

Similarly, when refinancing a property, whether you’re an investor or an owner occupier, you may wish to consider a variable rate mortgage to help keep your repayments on the low side, and to potentially gain access to other cost-saving features.

Compare variable rate home loans

At RateCity, there are several options available to help you find the ideal variable rate home loan to suit your financial situation. You can look at the current RBA cash rate and compare it to the other interest rates on the market with the RateCity RBA Rate Tracker. You can also use our calculators to estimate how much you could borrow, or the affordability of different loans.

And of course, you can also compare the interest and comparison rates of a wide variety of variable rate home loans all in the one place, and quickly narrow down your shortlist of lenders to consider when selecting your variable rate home loan.

If you're looking for more help finding a variable rate loan that best suits your financial situation, it may be worth reaching out to a mortgage broker for additional help and information.

Frequently asked questions

What happens to my home loan when interest rates rise?

If you are on a variable rate home loan, every so often your rate will be subject to increases and decreases. Rate changes are determined by your lender, not the Reserve Bank of Australia, however often when the RBA changes the cash rate, a number of banks will follow suit, at least to some extent. You can use RateCity cash rate to check how the latest interest rate change affected your mortgage interest rate.

When your rate rises, you will be required to pay your bank more each month in mortgage repayments. Similarly, if your interest rate is cut, then your monthly repayments will decrease. Your lender will notify you of what your new repayments will be, although you can do the calculations yourself, and compare other home loan rates using our mortgage calculator.

There is no way of conclusively predicting when interest rates will go up or down on home loans so if you prefer a more stable approach consider opting for a fixed rate loan.

What is a variable home loan?

A variable rate home loan is one where the interest rate can and will change over the course of your loan. The rate is determined by your lender, not the Reserve Bank of Australia, so while the cash rate might go down, your bank may decide not to follow suit, although they do broadly follow market conditions. One of the upsides of variable rates is that they are typically more flexible than their fixed rate counterparts which means that a lot of these products will let you make extra repayments and offer features such as offset accounts.

What is the difference between fixed, variable and split rates?

Fixed rate

A fixed rate home loan is a loan where the interest rate is set for a certain amount of time, usually between one and 15 years. The advantage of a fixed rate is that you know exactly how much your repayments will be for the duration of the fixed term. There are some disadvantages to fixing that you need to be aware of. Some products won’t let you make extra repayments, or offer tools such as an offset account to help you reduce your interest, while others will charge a significant break fee if you decide to terminate the loan before the fixed period finishes.

Variable rate

A variable rate home loan is one where the interest rate can and will change over the course of your loan. The rate is determined by your lender, not the Reserve Bank of Australia, so while the cash rate might go down, your bank may decide not to follow suit, although they do broadly follow market conditions. One of the upsides of variable rates is that they are typically more flexible than their fixed rate counterparts which means that a lot of these products will let you make extra repayments and offer features such as offset accounts.

Split rates home loans

A split loan lets you fix a portion of your loan, and leave the remainder on a variable rate so you get a bet each way on fixed and variable rates. A split loan is a good option for someone who wants the peace of mind that regular repayments can provide but still wants to retain some of the additional features variable loans typically provide such as an offset account. Of course, with most things in life, split loans are still a trade-off. If the variable rate goes down, for example, the lower interest rates will only apply to the section that you didn’t fix.

What is a standard variable rate (SVR)?

The standard variable rate (SVR) is the interest rate a lender applies to their standard home loan. It is a variable interest rate which is normally used as a benchmark from which they price their other variable rate home loan products.

A standard variable rate home loan typically includes most, if not all the features the lender has on offer, such as an offset account, but it often comes with a higher interest rate attached than their most ‘basic’ product on offer (usually referred to as their basic variable rate mortgage).

What is the difference between a fixed rate and variable rate?

A variable rate can fluctuate over the life of a loan as determined by your lender. While the rate is broadly reflective of market conditions, including the Reserve Bank’s cash rate, it is by no means the sole determining factor in your bank’s decision-making process.

A fixed rate is one which is set for a period of time, regardless of market fluctuations. Fixed rates can be as short as one year or as long as 15 years however after this time it will revert to a variable rate, unless you negotiate with your bank to enter into another fixed term agreement

Variable rates is that they are typically more flexible than their fixed rate counterparts which means that a lot of these products will let you make extra repayments and offer features such as offset accounts however fixed rates do offer customers a level of security by knowing exactly how much they need to set aside each month.

What is a fixed home loan?

A fixed rate home loan is a loan where the interest rate is set for a certain amount of time, usually between one and 15 years. The advantage of a fixed rate is that you know exactly how much your repayments will be for the duration of the fixed term. There are some disadvantages to fixing that you need to be aware of. Some products won’t let you make extra repayments, or offer tools such as an offset account to help you reduce your interest, while others will charge a significant break fee if you decide to terminate the loan before the fixed period finishes.

How do I refinance my home loan?

Refinancing your home loan can involve a bit of paperwork but if you are moving on to a lower rate, it can save you thousands of dollars in the long-run. The first step is finding another loan on the market that you think will save you money over time or offer features that your current loan does not have. Once you have selected a couple of loans you are interested in, compare them with your current loan to see if you will save money in the long term on interest rates and fees. Remember to factor in any break fees and set up fees when assessing the cost of switching.

Once you have decided on a new loan it is simply a matter of contacting your existing and future lender to get the new loan set up. Beware that some lenders will revert your loan back to a 25 or 30 year term when you refinance which may mean initial lower repayments but may cost you more in the long run.

If I don't like my new lender after I refinance, can I go back to my previous lender?

If you wish to return to your previous lender after refinancing, you will have to go through the refinancing process again and pay a second set of discharge and upfront fees. 

Therefore, before you refinance, it’s important to weigh up the new prospective lender against your current lender in a number of areas, including fees, flexibility, customer service and interest rate.

Can I refinance if I have other products bundled with my home loan?

If your home loan was part of a package deal that included access to credit cards, transaction accounts or term deposits from the same lender, switching all of these over to a new lender can seem daunting. However, some lenders offer to manage part of this process for you as an incentive to refinance with them – contact your lender to learn more about what they offer.

How personalised is my rating?

Real Time Ratings produces instant scores for loan products and updates them based what you tell us about what you’re looking for in a loan. In that sense, we believe the ratings are as close as you get to personalised; the more you tell us, the more we customise to ratings to your needs. Some borrowers value flexibility, while others want the lowest cost loan. Your preferences will be reflected in the rating. 

We also take a shorter term, more realistic view of how long borrowers hold onto their loan, which gives you a better idea about the true borrowing costs. We take your loan details and calculate how much each of the relevent loans would cost you on average each month over the next five years. We assess the overall flexibility of each loan and give you an easy indication of which ones are likely to adjust to your needs over time. 

Do other comparison sites offer the same service?

Real Time RatingsTM is the only online system that ranks the home loan market based on your personal borrowing preferences. Until now, home loans have been rated based on outdated data. Our system is unique because it reacts to changes as soon as we update our database.

How does Real Time Ratings work?