A basic variable home loan is generally a discounted variable rate home loan without all the extra features some home loans may have. While they generally have a great interest rate, they may not have other home loan features like an offset account, a no annual fee credit card or application fee discounts. Some basic variable home loans do though, as all lenders offer different mortgage products, so it is worthwhile checking with a mortgage broker, the different options available to you.

The interest rate on a basic variable home loan is variable, so the interest rate can either increase or decrease if the Reserve Bank of Australia, or the bank itself changes the variable interest rate. 

With most basic variable home loans though, you can pay as much into the loan as you want, without penalty and have access to any extra funds paid into the home loan via redraw, should you need them in the future. Some banks or lenders may have a fee to redraw from your home loan, but most lenders these days offer free redraw via internet banking. Some basic variable home may also have a monthly fee, which can range from around $0 to $12 a month.

There are some banks that can have the ability to have an offset account with a basic home loan, and the fee for the offset account may range from $0 to $10 a month.

Basic variable home loans can be a good option, the flexibility of being able to pay the loan down faster, with a great interest rate and no or low fees. You may not need all the extras that a fully featured home loan may offer (like a bank or lenders professional packaged home loan), and may save yourself from paying unnecessary fees, like an annual fee.

If you would like some more information about a basic variable home loan, please contact Perth Mortgage Broker Group, or call Troy on 0411 229 602, 7 days a week