What is Variable Rate?
A variable rate is an interest rate that moves up or down based on lender decisions — usually in response to RBA cash rate changes, funding cost movements, or competitive pressure. Repayments shift when the rate shifts.
Why it matters for you
Variable rates offer maximum flexibility: unlimited extra repayments, offset accounts, free redraw, portability, easy refinancing. Rate risk lives with the borrower. For most Australian borrowers with savings discipline, a competitive variable rate with offset is the right default — unless rate certainty is critical (e.g. tight household budget).
Last updated: April 2026