Variable Home Loan
When choosing between the many different home loans there are on offer, the debate often comes down to fixed rate and variable home loans. Understanding the difference between these popular options is critical to successfully choosing your property goals, as it can have a tremendous impact on the total cost of your mortgage and how easy it will be to pay it off.
Future Financial offer variable home loans at some of the most competitive rates, with a variety of features to advantage borrowers’ flexibility and satisfaction.
What are variable home loans?
While a fixed rate home loan allows you to fix a particular interest rate for a set period of time, variable home loan rates change according to the ebbs and flows of wider economic conditions. These interest rates are typically lower than other mortgage products, but move up and down according to the market. Some of the elements that can affect interest rates include:
- the general state of the economy
- government policies
- level of government debt
The interest rates set by lenders tend to follow the cue of the Reserve Bank of Australia’s official cash rate, which is also influenced by these factors.
What are the advantages of variable home loans?
Variable home loans tend to be particularly advantageous for those who favour flexibility in their mortgages. Because the interest rate is always changing, your mortgage repayments can frequently shift based on the wider market.
This can be especially useful if interest rates happen to fall, lowering your monthly repayments. With a fixed rate mortgage, it can happen that you set your interest rate at what seems like the most favourable level, only for it to fall soon after. But with a variable home loan rate, depending on economic conditions, you could wind up paying your loan off quicker than you had planned.
In addition to this, the variable home loans offered by Future Financial have a number of useful features:
- the option of making additional repayments without added penalty
- a 100 per cent offset account at no extra charge
- free redraw facility, to take advantage of any extra repayments you make
All of these features not only favour those who are after added flexibility in the way they use their mortgage, but can also make it easier to meet monthly household budgets. If any additional repayments end up backfiring down the line, for instance, the free redraw facility will give you added financial security without incurring a penalty.
The case of Justin from Liverpool City
Justin is a 29-year old dentist who recently moved from the Sydney CBD to Liverpool City in the city’s south west, in order to take advantage of its affordable house prices. He wanted to purchase a property that would be both a home and a solid investment over time, but also aimed to get the most advantageous deal in terms of price – he’s saving to start his own dental practice someday.
Justin spoke with the home loan specialists at Future Financial about his options, and he decided to take out variable home loan to purchase his property. He liked the flexibility that was involved with variable home loan rates and, having done some research, determined that interest rates were likely to get lower for the foreseeable future. He could use that time to make additional or higher repayments on his loan and pay it off faster.
Now, Justin is well on the way to paying off his mortgage and, thanks to favourable market conditions, he’s also saving while he does so. He’ll open up his own business in no time.
Take out a variable home loan from Future Financial
Future Financial have the knowledge and experience to get you a suitable loan with the most favourable variable home loan rates and the least hassle. We work with a variety of brokers and lenders, giving our customers a unique degree of choice when it comes to loans.
Get in touch with one of our friendly staff today to find out your options.
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A Home Owners Guide To Refinancing
From the moment you turn the key in the lock and take those first few steps through your new front door, the feeling of owning your own home is second to none.
Your Home Your Mortgage aims to arm home buyers and investors with essential know-how and proven techniques to ensure you avoid the common pitfalls of financing a property.
There’s no question the current mortgage environment is one of the most competitive in our nation’s history.
Refinancing provides Australians with a platform to get a better deal on their current mortgage, many of which may have been locked in some years ago at interest rates well above what’s on offer in today’s competitive market.