No Frills Home Loans - Basic Variable Rate
The basic variable rate home loan is the simplest of the loans. Sometimes called ‘no-frills’ loans, the Basic Variable Rate typically come with few features but tend to offer good interest rates as a way to make up for the lack of extras found in other loan varieties.
No Frills home loans are favoured by first-time home buyers and by those who are looking for a loan that is easy to understand. Buyers with strict budget parameters also like the no frills rate loan due to its lower payments.
Pros of Basic Variable Rate Home Loans
- Your repayment amount can fall if interest rates lower because the rate is variable
- Having an option to redraw will rein-in any spending of excess funds
- The length and amount of your mortgage can lower should you take advantage of the option to make extra payments
- The interest rates are normally lower than other types of loans
Cons of Basic Variable Rate Home Loans
- These lack Offset Accounts & Redraw features
- Variable interest rates mean your repayment amount may increase if interest rates rise
- These loans are usually inflexible