Standard Variable
Since it is the loan with the most flexible repayment term, many borrowers apply for a Standard Variable Home Loan. Aside from a flexible repayments borrowers with this type of loan can also get lots of extra features. The ability to make extra repayments, redraw from funds and split loans between a fixed and a variable loan.
Other features may include:
- Loan portablity
- Salary crediting
- Cheque books and credit cards
- ATM access
The Standard Variable Home Loan’s interest rate follows the developments of the official cash rate that is determined by the Reserve Bank of Australia. If the RBA interest rate drops, so to does the standard variable home loan.
Obviously, a Standard Variable Home Loan is not really a standard loan for lending firms have different standard rates. There might also be times when the lender’s rate stays the same even if the RBA rate changes. If it does change, the level of difference for the lending companies may vary.
