What Is the Danger of Taking a Variable Rate Loan?
It’s no secret that the greatest risk attached to a variable rate loan is uncertainty. The introductory offers for this mortgage type beat the ones attached to a fixed-rate home loan. However, economic circumstances will change over 30 years.
The Reserve Bank of Australia determines interest rates. They take a look at the cash rate monthly. Based on the current economic situation, they leave the interest rates as is, or they alter them. In a heated economy, the Reserve Bank will raise the rates. If the economy is sluggish, they lower the rates.
Once you lock into a variable rate mortgage and loan terms, you remain in. But you have options. If interest rates go against you, Mortgage House offers tools to offset some of the interest rate charges. If interest rates drop in your favor, it’s a good time to refinance.
Plus when you refinance, you can switch to a new lender such as Mortgage House.
Becoming a homeowner is a large responsibility, especially if you finance the purchase with debt. However, it’s possible to mitigate some of the risks. Financially responsible homeowners can overcome challenges if rates rise.
For example, Mortgage House offers the Affordable First Home Buyer Special variable rate loan. It starts with a 1.99% interest rate and has several features. Home loan features include an offset account, redraw facility, relocation, and additional repayments.
Variable Rate Loan Conclusion
Mortgage House offers several mortgages that fall into the variable rate loan category. To discuss your options, contact our loan specialists. Try our home loan calculator in the meantime.