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Standard Variable Rate

Standard Variable Rate: An interest rate, which is applied to a loan.

These may have features such as redraw facility, construction, split loans options and mortgage offset.

The standard variable rate is the basis for most of the discounted loans – for example 1% off the standard variable rate with XYZ package. Banks often jostle for and advertise that they have “the lowest Standard Variable Rate Home Loan”, which makes me laugh because no one is paying standard variable rates anymore and the discount you can achieve varies from lender to lender – so lender A may have a standard variable rate which is 20 pts higher but may offer a 1% discount and bank B is 20 pts cheaper but only offers a 0.6% discount. As a consumer its difficult to easily make these comparisons.

But as a broker – it’s part of the job.

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