A Basic (or No Frills) Variable Rate Home Loan is a straight forward non-complicated loan with minimal features, a competitive interest rate and no annual or monthly fees. Payment of an establishment or application fee varies between lender with some charging $0.
These loans have minimal features (eg no offset accounts) and hence the lower interest rate. This lower interest rate making this type of loans suitable for those wanting to keep their repayments minimal and who don’t need access to any additional loan features.
Three attractive features which are normally available with Basic Variable Home Loans are:
- Extra repayments can be made.
- Early Payout is usually possible with no penalty fee.
- Redraw are possible though some lender do have some minor restrictions on these like minimum redraw amounts.