Compare some of the lowest variable home loan rates
Looking for a competitive variable home loan rate? The table below displays a range of owner-occupier variable home loan rates from our Online Partners. The results are sorted first by comparison rate^ (lowest to highest), then by highest Star Ratiing and then alphabetically by brand.
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The initial results in the table above are sorted by Comparison rate^ (Low-High) , then Star Rating (High-Low) , then Provider Name (Alphabetical) . Additional filters may have been applied, see top of table for details.
With a variable rate home loan, your interest rate can go up or down as the market changes. These home loans often come with more features than fixed rate home loans, which could give you greater flexibility for paying off your loan.
Canstar compares thousands of home loans from more than 80 lenders. If you’re considering a variable rate home loan, we’ve rounded up some of the lowest variable home loan rates currently on our database below.
We’ve included the current rates and comparison rates. The comparison rate takes into account the interest rate, plus most upfront and ongoing fees and charges. It can be helpful when estimating the total cost of a loan per year.
Please note that the interest rates below do not take into account your credit history or other factors specific to your application. That means not everyone may necessarily qualify for a lender’s minimum advertised rate. Further eligibility criteria may be assessed and determined by the lender.
What is a variable rate home loan?
A variable rate home loan is a home loan with an interest rate that can change. The interest rate can go up or down, meaning your repayments can also fluctuate. Lenders usually change rates in line with the cash rate as set by the Reserve Bank of Australia (RBA), along with other factors.
This is compared to a fixed rate home loan where the interest rate stays the same for a set period of time, usually between one and five years.
Another option is a split home loan, where a portion of your home loan has a fixed interest rate and the rest has a variable rate.
What are the features of a variable rate home loan?
Variable rate home loans usually offer more features than fixed rate home loans. Some features you may have access to include an offset account, the ability to make extra repayments, a redraw facility and packaged extras.
Offset account
An offset account is a bank account that is linked to your home loan. The account balance is offset against your home loan balance. This reduces the balance of your home loan and therefore reduces the interest you have to pay. For instance, if you had a home loan balance of $350,000, with $50,000 in a 100% offset account, you would only be charged interest on a loan balance of $300,000.
Ability to make extra repayments
Making additional repayments above your minimum repayments can reduce your home loan balance and reduce the amount of interest you pay. This could help you pay off your home loan quicker.
Redraw facility
A redraw facility lets you access any additional repayments you have made on your home loan. These funds can be taken out if you need them; for example, to cover renovations or other unexpected expenses.
Packaged extras
Some lenders offer packaged home loans that combine your home loan with other banking products, such as credit cards or everyday bank accounts. This may mean you pay only one package fee, rather than multiple fees across the different products. You may also get a discount on your interest rate. But it’s important to work out whether the potential savings are worth it overall.
What are the pros and cons of a variable rate home loan?
Variable home loans often come with more features than fixed home loans, which could offer you more flexibility and boost the value you get overall. But your interest rate can change at any time, meaning you have less certainty over your repayments.
Pros:
- Flexibility. You may be able to make additional repayments above what you owe, which could help you pay off your home loan quicker.
- Features. You may be able to get features like an offset account and redraw facility, as well as packaged extras.
- You may benefit from interest rate cuts. If your lender decreases its interest rates, you could end up paying less each month or pay off your home loan quicker.
Cons:
- You may have increased repayments. If your lender increases its interest rates, you may have to pay higher repayments.
- Uncertainty. The interest rate can move at any time, so this can make budgeting more unpredictable.
Read more about the pros and cons of variable rate home loans.
How long does a variable rate home loan last?
Home loans are typically repaid over a period of 25 to 30 years. When you apply for a variable rate home loan, you will agree with the lender on the term and the repayment schedule. If you choose a shorter loan term, you will generally pay higher repayments but less in interest. If you choose a longer loan term, you will generally have lower repayments but will pay more in interest.
How to find the lowest variable home loan rate
A loan’s interest rate is an important factor and it can make a significant difference to the total cost of the loan. But there are also other factors to consider. This includes any fees attached to the loan and the features available. It’s also important to weigh up if it’s worth paying for any features and whether they add value overall.
While you are comparing home loans, consider taking a look at Canstar’s Home Loan Star Ratings and Awards. Canstar’s expert researchers assessed thousands of home loans, including variable home loans, to see which ones offered the best value. If you are a first home buyer, you might also be interested in our latest First Home Buyer Award and finding out more about the First Home Loan Deposit Scheme
Frequently Asked Questions about Variable Rate Home Loans
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Canstar Star Ratings and Awards
Looking for an award-winning product or to switch providers or brands? Canstar rates products based on price and features in our Star Ratings and Awards. Our expert Research team shares insights about which products offer 5-Star value and which providers offer outstanding value overall. We also reveal which providers have the most satisfied customers in our dedicated Customer Satisfaction Awards.
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About our home loan experts
Alasdair Duncan, Senior Finance Journalist
Joshua Sale, Group Manager, Research & Ratings
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