Basic variable rate home loans (also known as “No Frills” or “Vanilla” home loans) are the simplest home loan products available and typically come with few features. These home loans have lower interest rates when compared to standard variable rate home loans to compensate for the lack of included features.
Basic Home Loan Advantages
- Lower interest rates compared to standard variable rates.
- Due to their variable nature, if the interest rates fall, so too will your loan repayments.
- Extra repayments are allowed, which can reduce length and cost of your mortgage.
- Depending on your level of thrift, not having the ability to Redraw, can remove the temptation to spend any extra funds that you have paid off the home loan.
Basic Home Loan Disadvantages
- Due to their variable nature, if interest rates rise, so too will your loan repayments.
- Less flexible.
- Fewer features and lack Offset Accounts & Redraw
Most Suitable For
Basic home loans by their simple nature and lower rates make them particularly appealing to first home buyers, for anyone on a tight budget or whoever just wants a no fuss home loan.
Want to talk more about your home loan options?
If yes, then please get in touch with me today and I'll be happy to help. All my home loan and mortgage services (from the initial meeting, right through to home loan settlement) are completely free to you.