NAB Introductory Rate Home Loan
Posted May 6th, 2010
and last modified January 30th, 2012
How does the NAB Introductory Rate Home Loan (12 Months Fixed) compare? Is it the right Home Loan for you? Many questions need to be asked and answered when considering a new Home Loan.
Define Variable Interest Rate
A Variable Interest rate is best described as:
- An interest rate that moves up and down based on the changes of an underlying interest rate index.
- For example – The Reserve Bank of Australia is an underlying interest rate index, and variable rates will either increase or decrease as the Reserve bank sees fit for the economy.
What changes after 12 months?
Before choosing the right home loan for you, you must put the features of the home loan under scrutiny:
- Portability – If you buy another home, you could keep the same loan and secure it against your new home.
- Split loans – You can take out 2 different loans for the same property with just 1 application fee.
- Use it for Building – Available with variable rate loan only. Allows you to make progressive payments to builders.
- Flexible repayment options – You can repay your Home Loan Monthly, Fortnightly or weekly.
- Borrow a large amount – You can borrow up to 95% of your property Value, providing you with less time saving and own your dream home sooner
- Take a Break – Take a break from repayments if you’re ahead of scheduled repayments
- Redraw on your Loan – You can redraw a minimum of $2000 if you are currently ahead of scheduled repayments (during the variable period of the loan)
Once you have considered the various products of the Home loan, you must also consider the possible negative effects that particular loan could have on your financial security over the term of the loan.
Pros and Cons of Variable Interest Rates
Positive component:
Generally, variable rates are quoted lower than Fixed rates due to the risks involved with a variable. This means that red line benchmarking the rates goes down, your interest rate automatically declines with it. But this only occurs at particular set times, for example when the loan is established or at the beginning of the year.
Negative drawback:
One of the most common concerns with variables is when the Market rates rise after the variable rate has taken affect. If a seven percent initial rate rises to eight percent, it is very unlikely that there will be a lower fixed rate available to the borrower at the time.
Read the official terms and conditions
Top Home Loans
| Home Loan | Details | Interest Rate (p.a.) | Comp Rate^ (p.a.) | App Fee / Ongoing Fee | Max LVR | Min & Max Borrowing | |
|---|---|---|---|---|---|---|---|
 Loans.com.au - Dream Catcher | A home loan offer with a $0 application fee and one of the lowest available home loan interest rates. | 6.13% | 6.47% | $0 / $375 | 80% | $50,000 / $750,000 |
 
|
 UBank UHomeLoan (Variable Rate) | One of the market leading variable interest rates. The maximum loan amount needs to be 80% of the property value. | 6.14% | 6.14% | $0 / $0 | 80% | $100,000 / $1,000,000 |
|
 State Custodians Mortgage Company Standard Variable Offset Loan | Awarded the 2011 Non bank Lender of the Year this feature-packed loan rewards customers with a bonus rate drop of 0.20% after 5 years. | 6.22% | 6.45% | $0 / $345 | 95% | $150,000 / $2,500,000 |
|
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