Variable Rate Home Loan

What is a variable rate home loan?

A variable rate home loan is a type of mortgage where the interest rate can change over time. Unlike a fixed-rate loan where the interest rate stays the same for the entire loan term, with a variable rate loan, the interest rate can go up or down based on changes in the market or the policies of the lender. 

What are the advantages of a variable home loan rate? 

The main advantage of a variable home loan compared to a fixed rate loan is that it can potentially save you money if interest rates go down. When interest rates drop, your mortgage repayments can decrease, leaving you with more money in your pocket. 

However, this arrangement does cause some uncertainty unlike a fixed rate as its variability can make it potentially challenging to predict cash flow. 

Can I switch from a variable rate to a fixed-rate loan? 

With many lenders, you can typically change your loan from a variable rate to a fixed rate, or vice versa. However, there may be fees or policies associated with switching from lender to lender.