Basic Home Loan

A variable home loan is one with an interest rate that can change over time, often in response to shifts in the Reserve Bank’s official cash rate. While it can be hard to predict and may lead to fluctuating repayments for borrowers, the variable interest rate offers more flexibility around additional payments and — if market rates decrease — those benefits are typically passed on to you.

As with most things, the answer is: it depends. Both options can provide opportunity and convenience in different ways, but which one is best for you largely depends on your personal circumstances. Speaking to a financial adviser or professional can be useful in helping you weigh up if you would benefit from the security and certainty of a fixed rate loan, or the flexibility and appeal of a variable rate loan.

Getting out of debt and paying off your home loan faster can be a good financial move. At Summerland Bank, we don’t penalise those trying to get ahead by making extra repayments on their variable home loan. Even an extra payment once a year can make a big difference and help you reduce the loan term and save money on interest.