What is a Standard Variable Loan? 🐾
So… what actually is a Standard Variable Loan?
SVR Explained
A Standard Variable Rate (SVR) home loan is one of the most common types of mortgages in Australia. The key word here is variable — meaning the interest rate can go up or down over time.
Banks and lenders tend to move their variable rates in response to things like:
RBA cash rate announcements
Market conditions
Their own funding costs
Because the rate isn’t locked in, your repayment amount can change too — sometimes higher, sometimes lower.
Why do people choose variable loans?
Great question. Variable loans can offer:
Flexibility — you can often make extra repayments without penalties.
Redraw — Normally included with SVR loans at no extra cost, so you can have access to any extra money you’ve paid in.
The chance to benefit when rates drop — your repayments could fall automatically.
They’re popular with Aussies who want more control and room to move.
And the downsides?
It’d be unfair not to mention that:
Rates can rise, and repayments can spike (like what happened after COVID).
Harder to budget long-term
Lenders usually reserve their lowest “headline” rates for fixed loans or new-client promos
Is a standard variable loan right for you?
That depends on your goals, your cash flow, and how much volatility you can handle. Some people love the flexibility. Others prefer the predictability of fixed rates (blog coming soon). And many choose split loans for the best of both worlds.
As always — there’s no “one size fits all.” But understanding how SVRs work is step one in choosing the right setup for your family and your future.
If you want to chat about your options — no pressure, no obligations — just give me a shout.
Iain & Dave
Your rural-friendly mortgage & finance guides