What is a variable rate home loan?

A variable rate home loan is exactly what it sounds like: a home loan on which the interest rate can fluctuate, varying up and down at any time. Unlike a fixed-rate home loan a variable interest rate is changed regularly by your lender.

Changes up or down in a variable interest rate are based on factors such as the RBA official cash rate, changes in market interest rates, or business decisions made by your financial institution.

A variable rate loan means that the monthly loan payments will change to match any change in the interest rate applied.