However, it does offer lower interest rates than a standard variable home loan. Basic variable home loans are usually quite popular with first home owners who don’t need all the features of a standard variable home loan, but want a competitive interest rate.
Advantages of a Basic Variable Home Loan
- Lower interest rate than standard variable home loans
- Repayments are lower than standard variable home loans
- If interest rates drop, repayments also drop
- Most basic variable home loan products allow the borrower to make extra repayments
- Most basic variable home loan products have terms of 25 to 30 years
Disadvantages of a Basic Variable Home Loan
- Fewer features and less flexibility
- Many basic variable home loans cannot be used in conjunction with other loans and are not portable
- You may have to pay an extra fee for additional loan features
- If interest rates rise, repayments also rise