17 Jan 2022
Can You Pay Off a Variable Rate Mortgage Early?
Variable-rate mortgages differ from fixed-rate mortgages. The variable-rate version has more features. Among them is the option to pay it off early. These mortgages carry more risk than the fixed-rate version because home loan interest rates fluctuate. They can go against the homeowner.
Therefore, homeowners who can pay off their home loans early benefit from doing so.
Mortgage House variable rate loans have four features.
Competitive Interest Rates: Although interest rates fluctuate, data shows that homeowners with variable-rate home loans pay less than the fixed-rate version. In addition, Mortgage House has tools that help our loan specialists find competitive loan terms.
Potential for Lower Monthly Repayments: A fixed-rate mortgage retains the same rate for its entire life. Variable-rate home loan holders, on the other hand, benefit when rates drop in their favor. This means that monthly repayments can fall lower and benefit the homeowner.
Extra Repayments without Incurring a Penalty: A homeowner who wishes to send extra repayments can without incurring a penalty. The faster the homeowner chips away at the principal, the more money they save in the long run.
Access to Redraw Facility: Mortgage House can set up a redraw facility on its variable-rate home loans. The extra amount the homeowner pays goes into this account. If they require the funds, the funds remain available for redraw.
Variable Rate Mortgage Conclusion
In most cases, homeowners can pay off their variable rate mortgage early without incurring a penalty. Every home loan is a bit different from the next based on the homeowner. However, variable rate home loans have different parameters. To explore your options, speak with our Mortgage House loan specialists.