Best Variable Home Loan Rates in Australia
RATE OF THE DAY
Variable
5.59%
Comparison Rate*
5.61%
This is our pick of the top rates available from the lenders we analysed. Rate shown is for investors making principal and interest repayments with a loan-to-value ratio of 80%
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The best variable home loan rates right now

These are some of the best variable home loan rates available from the major banks, plus the largest non-major banks and member-owned lenders.

The Big 5 Banks
Non-Major Banks
Member Owned
Lender
Basic variable
Offset variable
Investor basic variable
5.74%
Interest Rate
5.75%
Comparison Rate
6.14%
Interest Rate
6.52%
Comparison Rate
5.89%
Interest Rate
5.90%
Comparison Rate
5.59%
Interest Rate
5.61%
Comparison Rate
5.59%
Interest Rate
5.85%
Comparison Rate
5.69%
Interest Rate
7.71%
Comparison Rate
5.84%
Interest Rate
5.97%
Comparison Rate
6.09%
Interest Rate
6.34%
Comparison Rate
5.94%
Interest Rate
6.07%
Comparison Rate
6.14%
Interest Rate
6.14%
Comparison Rate
6.99%
Interest Rate
6.99%
Comparison Rate
6.39%
Interest Rate
6.39%
Comparison Rate
6.19%
Interest Rate
6.19%
Comparison Rate
6.54%
Interest Rate
6.63%
Comparison Rate
6.71%
Interest Rate
6.71%
Comparison Rate
Owner occupier/investor loans with principal and interest repayments and 50% LVR
Lender
Basic variable
Offset variable
Basic investor variable
5.69%
Interest Rate
5.70%
Comparison Rate
5.84%
Interest Rate
6.02%
Comparison Rate
5.89%
Interest Rate
5.90%
Comparison Rate
5.83%
Interest Rate
5.84%
Comparison Rate
5.88%
Interest Rate
6.24%
Comparison Rate
5.99%
Interest Rate
6.00%
Comparison Rate
5.84%
Interest Rate
5.86%
Comparison Rate
5.89%
Interest Rate
6.07%
Comparison Rate
5.89%
Interest Rate
5.91%
Comparison Rate
5.83%
Interest Rate
5.98%
Comparison Rate
5.89%
Interest Rate
6.02%
Comparison Rate
5.93%
Interest Rate
6.08%
Comparison Rate
5.89%
Interest Rate
5.92%
Comparison Rate
5.89%
Interest Rate
6.18%
Comparison Rate
6.04%
Interest Rate
6.07%
Comparison Rate
Owner occupier/investor loans with principal and interest repayments and 50% LVR
Lender
Basic variable
Offset variable
Basic investor variable
5.74%
Interest Rate
5.76%
Comparison Rate
-
Interest Rate
-
Comparison Rate
5.89%
Interest Rate
5.91%
Comparison Rate
5.74%
Interest Rate
5.78%
Comparison Rate
5.89%
Interest Rate
6.23%
Comparison Rate
5.94%
Interest Rate
5.98%
Comparison Rate
5.64%
Interest Rate
5.67%
Comparison Rate
5.64%
Interest Rate
6.00%
Comparison Rate
5.77%
Interest Rate
6.48%
Comparison Rate
5.63%
Interest Rate
5.63%
Comparison Rate
5.63%
Interest Rate
5.82%
Comparison Rate
5.84%
Interest Rate
5.84%
Comparison Rate
5.79%
Interest Rate
5.85%
Comparison Rate
5.89%
Interest Rate
5.95%
Comparison Rate
5.94%
Interest Rate
5.96%
Comparison Rate
Owner occupier/investor loans with principal and interest repayments and 50% LVR

Why choose a variable rate home loan

1.
Take advantage of rate cuts: One of the main advantages of a variable rate home loan is that if interest rates fall, your lender will likely pass on the cut and you’ll benefit with lower repayments. Of course, the opposite is also true and if rates increase, your variable rate will also jump, with higher repayments required.
2.
Flexibility to switch: When you have a variable rate home loan, the barrier to switching your home loan is low. Unlike a fixed rate loan, you won’t have high exit fees to contend with. Instead the switching process is straightforward on variable rate loans, with low costs typically.
3.
Repay extra: Lenders are much more likely to allow extra repayments without fees on a variable rate home loan, versus fixed loans. That means that if you can afford to pay extra, you’re free to do so with no loan penalties. You can also generally redraw the extra money you have paid into our loan if you need to.
4.
You may have an offset facility: Not all, but a lot of variable rate home loans come with an offset account, which is another feature that helps you save on interest. It allows you to use your savings or any other spare cash you have to reduce the interest you pay on your loan. Few fixed rate loans offer redraw.
5.
More options: Most lenders offer multiple different variable rate home loans. Usually there’s at least the choice between a basic low-rate variable option and a more premium product with extra features and a higher rate. By contrast most lenders offer a single standard fixed rate products.
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Where can I find the best interest-only home loan rates?

In Australia, the lowest variable home loan rates are offered by non-bank lenders, specialist lenders and customer-owned banks. In other words, it’s worth shopping around beyond the major banks.

Below we’ve rounded up the lowest variable rates currently available across basic and package variable home loans, both for owner occupiers and investment home loan rates.

Lowest basic variable rate home loans for owner occupiers

Product Interest rate Comparison rate* Max LVR
in1bank in1home 5.08% p.a. 5.13% p.a. 50%
Laboratories Credit Union Simple Home Loan Owner Occupied 5.19% p.a. 5.21% p.a. 95%
Pacific Mortgage Group Owner Occupied Variable Home Loan 5.34% p.a. 5.34% p.a. 80%
Move Bank Everyday Variable Home Loan 5.39% p.a. 5.29% p.a. 80%
RACQ Bank Fair Dinkum Home Loan 5.39% p.a. 5.40% p.a. 80%
Gateway Bank Low Rate Essentials 5.39% p.a. 5.41% p.a. 50%
Australian Mutual Bank GumLeaf Basic Variable Rate Owner Occupied 5.39% p.a. 5.46% p.a. 60%
The Mac Credit Union Discounted Basic Variable Home Loan 5.42% p.a. 7.08% p.a. 80%
Greater Bank Great Rate Home Loan 5.44% p.a. 5.45% p.a. 80%
Reduce Home Loans Eco Variable 5.44% p.a. 5.50% p.a. 80%

Lowest package variable rate home loans for owner occupiers

Product Interest rate Comparison rate* Max LVR
in1bank in1offsethome 5.18% p.a. 5.62% p.a. 50%
Gateway Bank Green Plus Home Loan 5.35% p.a. 5.64% p.a. 80%
Police Credit Union Low Rate Home Loan Special Offer 5.39% p.a. 5.42% p.a. 80%
Up Home Up Home Variable Rate Loan 5.45% p.a. 5.45% p.a. 80%
G&C Mutual Bank Essential Worker Home Loan 5.45% p.a. 5.50% p.a. 95%
QBANK Classic Home Loan 5.49% p.a. 5.51% p.a. 60%
Regional Australia Bank Variable Home Loan 5.49% p.a. 5.52% p.a. 70%
Regional Australia Bank Variable Home Loan 5.49% p.a. 5.52% p.a. 60%
Australian Mutual Bank GumLeaf Standard Variable Rate Owner Occupied Home Loan 5.49% p.a. 5.56% p.a. 60%
Gateway Bank Premium Package 5.49% p.a. 5.80% p.a. 50%

Lowest basic variable rate home loans for investors

Product Interest rate Comparison rate* Max LVR
Laboratories Credit Union Simple Home Loan Investment 5.35% p.a. 5.37% p.a. 95%
Woolworths Team Bank Residential Investment Variable 5.46% p.a. 6.67% p.a. 80%
Pacific Mortgage Group Investment Variable Home Loan 5.59% p.a. 5.59% p.a. 80%
RACQ Bank Fair Dinkum Home Loan 5.59% p.a. 5.60% p.a. 60%
Hume Bank LiteBlue Variable 5.64% p.a. 5.65% p.a. 60%
Greater Bank Great Rate Investment Home Loan 5.69% p.a. 5.70% p.a. 80%
Macquarie Basic Home Loan P&I 5.69% p.a. 5.71% p.a. 60%
Bank First Basic Home Loan 5.69% p.a. 5.72% p.a. 60%
Regional Australia Bank Variable Investor Home Loan 5.69% p.a. 5.72% p.a. 60%
Regional Australia Bank Variable Investor Home Loan 5.69% p.a. 5.72% p.a. 70%

Lowest package variable rate home loans for investors

Product Interest rate Comparison rate* Max LVR
Police Credit Union Low Rate Home Loan Special Offer - Investment 5.54% p.a. 5.57% p.a. 80%
Police Credit Union Better Home Loan Special Offer Investment 5.54% p.a. 5.57% p.a. 80%
BCU Bank Variable Home Loan - Investment 5.69% p.a. 5.72% p.a. 90%
Regional Australia Bank Variable Offset Investor Home Loan 5.69% p.a. 5.72% p.a. 70%
Regional Australia Bank Variable Offset Investor Home Loan 5.69% p.a. 5.72% p.a. 60%
Australian Mutual Bank GumLeaf Investment Variable Rate (Principal & Interest) 5.69% p.a. 5.76% p.a. 60%
CommBank Digi Home Loan Investor 5.69% p.a. 5.82% p.a. 60%
Macquarie Offset Package Variable 5.69% p.a. 5.95% p.a. 60%
Move Bank Offset Variable Home Loan 5.74% p.a. 5.64% p.a. 80%
Horizon Bank First Home Buyer Loan Residential Investment 5.74% p.a. 5.74% p.a. 70%

How does a variable rate home loan work?

Most home loans in Australia come with a variable interest rate. You could say it’s the ‘standard’ home loan set up for the majority of borrowers. With a variable rate home loan, the interest rate can change at any time throughout the loan term.

In turn, that means that your repayments can go up or down due to changes in the market, or even pricing changes by your lender outside of the normal rate cycle. That said, most variable rate home loan changes happen within the broader interest rate cycle, as a result of changes to the official cash rate made by the Reserve Bank of Australia (RBA).

In addition to being more changeable in terms of rate, variable rate loans are also more flexible in terms of how you repay the loan. With a variable rate loan, you’ll generally have the ability to make extra repayments without penalty, use an offset account (although not all variable loans offer this) and switch loans or lenders with little cost or friction.

Is it better to have a variable rate home loan in 2026?

Variable rate home loans are less popular in 2026 than they have been in the past few years. The main driver of this is interest rate volatility. Rates have been up and down and up again in the last few years and ‘rate change fatigue’ is driving some customers away from variable and into a fixed rate.

Recent rate trends would suggest that borrowers who fixed their rate in the end of 2025 or early 2026 have done well, as consecutive rate increases by the RBA have pushed variable rates higher. But things can change quickly and in all likelihood, interest rates will eventually drop again.

Fixed rates have also increased so the benefits of choosing fixed over variable appear to be less compelling overall. Below we’ve rounded up some of the overall pros and cons of choosing a variable rate.

Pros of a variable home loan rate

  • It’s easier to refinance your loan later on if you find a better deal
  • You have more scope to save on interest by paying down your balance faster or keeping savings in offset
  • If rates go down, the savings will be passed on to you

Cons of a variable home loan rate

  • Means your repayments could go up or down
  • Can make month-to-month budgeting more unpredictable
  • Less peace of mind as you have little control over what is the biggest cost for most households

Are variable home loan rates lower than fixed rates?

Right now, variable home loan rates overall are lower than fixed rates. We’re at the point in the cycle where lenders have already priced interest rate increases into their fixed rates, but the increases have not yet filtered through to variable rates.

Experts are predicting at least one more interest rate increase this year, so it may be that before long variable rates are back above fixed rates. 

But if you’re comparing variable and fixed rates, you also have to consider the fixed term duration, as it’s not uncommon for rates on shorter fixed term durations to be lower than variable rates, but for longer fixed-term durations, the average interest rate is typically higher. 

The reason for this is that some lenders offer cheap rates on one and two-year fixed loans as a way of enticing borrowers in, and then retaining their business on a more expensive variable rate.

What will it mean for my home loan repayments if my variable rate changes?

What can seem like a small change to your variable home loan rate can have a significant impact on your costs, particularly for those with a large mortgage. Let’s look at the impact of a standard 25 basis point increase to an average mortgage of around $750,000.

Starting rate: 6.00% Rate cut: 5.75% Rate increase: 6.25%
Monthly repayment $4,832 $4,718 $4,948
Change to monthly repayment - -$114 +$116
Interest cost over 25-year loan term $699,678 $665,489 $734,256
Overall difference in interest costs - -$34,189 +$34,578

On that $750,000 loan, a standard rate cut would mean $114 less to pay per month, while a rate hike means paying $116 more per month.

Over the life of a 25-year remaining loan term that rate cut would mean a saving of $34,189 in interest, while the rate increase would mean needing to pay $34,578 more in interest.

What features can I get with a variable rate loan?

Popular features on a variable rate home loan include:

  • Extra repayments: Most variable rate home loans allow you to make repayments above the contracted minimum with no penalties for doing so. This means you can either pay a bit extra per month, forthright or week, or make a lump sum payment if you have spare cash at particular times of year.
  • Redraw facility: With a redraw facility, you can withdraw any extra repayments you have made on your loan. This amplifies the advantage of being able to make extra repayments, as it means you can pay as much as you can to aggressively drive down your interest costs, while retaining the ability to access those funds again if you need them. There may be minimum limits on how much you can redraw in an individual withdrawal.
  • Offset account: An offset account means you can keep your savings or any other spare cash in a separate transaction account (not in the loan itself), with every dollar in that account reducing the balance of your home loan that interest is charged on. This can be a big money saver. You can use that linked transaction account as you would any other, with a debit card and usually unlimited instant transfers in and out. 
  • Loan split: If you have a variable rate loan, you usually have the option of splitting a portion of it between a basic variable loan and a loan with offset. For example if you consistently have $50,000 in offset, you could split out $50,000 of your loan into an offset loan, with the full balance effectively offset and including noninterest. The rest of the loan balance could then be on a lower basic variable rate.
  • Package features: Some variable home loans come with additional features packaged into the loan (in return for an annual package fee). These features include discounted credit cards, insurance products or multiple offset accounts.

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What kind of rate is best: Variable, fixed or split rate?

Variable rate
The interest rate on a variable home loan can be increased or lowered by the lender at any time, generally when the Reserve Bank of Australia makes a change to the official cash rate. It means you have less certainty over your repayments over time, but there is the potential to lower your costs if interest rates go down. These loans generally offer more flexibility to make extra repayments and more loan features, like an offset account.
Fixed rate
If you go with a fixed rate loan, the interest rate is locked in for a set period of between one and five years. During the period your repayments will be at the same level. You’ll be protected from interest rate increases, but you won’t benefit if rates go down. These loans generally offer less scope to pay off extra and come with minimal extra features. There are break costs if you want to end the fixed term early.
Split rate
As the name suggests, a split loan offers a split between a fixed and variable rate. You effectively have two loans, one at a variable rate and the other at a fixed rate. It’s up to you how much of the loan goes on the variable rate and how much goes on the fixed rate. This may be the best option if you’re genuinely unsure whether to go variable or lock in your loan at a fixed rate.

Frequently asked questions

What causes changes to variable home loan rates?

Changes to variable rate home loans are almost always triggered by changes to the official cash rate, which is set by the RBA. The BRA Board meets eight times a year and decides whether to increase rates, cut them or leave them on hold.

The RBA’s rate changes are, in turn, usually influenced by the rate of inflation (prices rising) and the level of unemployment in the country.

If the RBA’s Board votes to change interest rates, lenders almost always increase or decrease their variable rate loans by the same amount for new and existing customers. There’s usually a delay of 2-4 weeks between the RBA changing the case rate and the impact being felt by home loan customers.

If my rate changes, will my repayments change automatically?

Yes, lenders usually automatically update the minimum repayment on customers’ home loans when rates change. They’ll simply contact you by email or letter to let you know that your repayments will be changing and by how much.

If rates drop, some borrowers may choose to keep their repayments at the same level. With an interest rate drop, keeping your repayments at the same amount means more of your repayments will be going towards paying off the loan principal as opposed to interest. This means you’ll be paying off your loan faster and saving money in interest.

How do I pay extra on my variable rate home loan?

Paying off extra on your home loan is usually simply a case of making a transfer to your home loan account, just like you would if you were transferring money to a different bank account. 

You could even set up a regular recurring payment per week, fortnight or month so you’re consistently chipping away at the loan balance over time. If for any reason you want to return your repayment to the lower level you would simply cancel the recurring additional transfer.

How often do variable rates change?

Variable home loan rates typically change a couple of times a year on average. For example, there were three rate cuts in 2025 and two rate increases in 2026 so far. But the number of changes varies depending on what is going on with the economy. 

In some recent years, there have been no rate changes (e.g. in 2026 and 2017) and in others there have been changes almost every month (there were eight separate rate cuts in 2022).

The number of RBA Board meetings was recently reduced from 11 per year to eight per year, meaning there are fewer opportunities for the Board to vote for a rate change. But that doesn’t necessarily mean fewer changes.

How do I split my home loan between variable and fixed?

If you want to split your loan between a variable and fixed rate, you’ll need to let your lender know that that’s what you would like to do and then decide on the following:

  • What portion of the loan will be variable and what portion will be fixed (e.g. 50/50 or 40/60)?
  • What duration of fixed rate loan do you want?
  • For the variable portion do you want a basic or package loan?

You will likely need to pay an application fee for the fixed portion of the loan, assuming you are switching from 100% variable to a variable/fixed rate split.

Is it easier to refinance a variable rate home loan?

Yes it’s generally more straightforward and cheaper to switch a variable home loan, compared to a fixed loan. Variable loans do not come with high exit fees or other switching costs. There is usually a discharge fee to close your current loan, but this is rarely more than a few hundred dollars.

Can I get a variable home loan with interest-only repayments?

Yes, many lenders offer variable home loans with interest-only repayments. If you choose this option, you’ll have lower repayments for a period of one to five years (or potentially longer on investment loans). 

After the interest-only period, your repayments will be higher, as you’ll be paying both off both the interest charged by the lender and the loan balance itself. Rates on interest-only loans are generally higher.

How can I save money on my variable rate home loan?

The best ways to save money on a variable rate home loan are to:

  • Find the lowest rate you can (ensuring the loan actually suits your needs)
  • Make extra repayments if you can afford to
  • Keep as much money as possible in your offset account if you loan comes with one
  • Make the regular repayments on your loan weekly or fortnightly as opposed to monthly
  • Regularly review your loan and switch lenders if you need to ensure you’re still on a competitive rate
  • Avoid increasing your loan term when you switch (some lenders default you back to 30 years) and even consider reducing your loan term if you can afford higher repayments

Will I pay less interest with a variable rate home loan?

Variable home loans generally offer more scope to borrowers to lower their home loan interest costs, but the savings won’t happen automatically. It’s up to borrowers to take advantage of the extra features on offer with a variable loan. 

If you don’t, how much interest you pay will be solely determined by the interest rate, and variable rates are not necessarily lower than fixed rates.

Are variable rates going up or down in 2026?

So far in 2026 interest rates have been increasing, following cash rate increases in February and March. Experts are predicting further cash rate hikes, which will mean home loan rates could reach their highest level in almost two decades.