Standard and Variable Rate Loans
Variable rate home loan are loan were the interest rate can vary ie the rate can move up and down. The rates usually move in line with the Reserve Bank however in the past lenders have moved outside of the reserve banks movements. If the variable rate increases your repayments generally will increase, if the rate decreases your repayments will generally decrease. Having a variable rate allows greatly flexibility from your home loan, you can pay as much extra as you like with out any penalties.