Do Variable Interest Rates Ever Go Down?
In an attempt to procure more customers for the lending industry, the variable rate loan arrived in the early 2000s. The loan provides low introductory interest rates. Thereafter it raises the lender’s standard rate.
The economy impacts the variable rate loan. If interest rates go up, so do the rates for the loan. The other side of the coin is that variable interest rates do drop too. That’s the main selling point against its fixed-rate counterpart.
Research shows that a homeowner can pay less for their home with a variable mortgage. However, this depends on the economy’s health. The Reserve Bank of Australia takes a look at the cash rate monthly. If they deem that the economy requires a boost, they can raise or decrease the rates.
If government authorities believe that more Australians need to borrow, interest rates see a drop. The action encourages consumers to borrow because it’s cheaper. In addition to benefiting the variable rate mortgage holder, they can also refinance the loan. This locks them into a better financial position. It allows them to change lenders too.
Understanding home loan interest rates allow the homebuyer to make the best mortgage decision for their financial situation. Mortgage House loan specialists can guide homebuyers too. They have access to proprietary tools that examine the homeowner’s current loan too.
Variable Interest Rates Conclusion
Variable interest rates can drop too. When they do not drop and the homeowner seeks relief, Mortgage House loan specialists can provide some guidance and tools. Contact our team today.