A variable rate loan costs more than the interest rate alone, so it pays to look at the whole price tag before you commit. If you're buying your first home in Palm Beach, a few minutes spent on fees and features can save you a surprise later.
What Is a Variable Interest Rate Home Loan?
A variable interest rate home loan has a rate your lender can move up or down over time, so your repayments can change. The trade-off is that you get flexibility, but you can't lock in one repayment amount the way you can with a fixed interest rate.
Many variable loans let you add extra features, such as an offset account or redraw. Those features are handy, but they can come with their own costs, which we cover below. Our home loans page shows the range of loan types we work with.
Which Fees Come With a Variable Rate Loan?
The fees on a variable rate loan depend on the lender and the product, so you need to ask for the full fee list for each loan you're considering. Look at any upfront application or settlement fees, any ongoing or package fees, and what the lender charges if you pay the loan out or switch later.
A lower headline rate can be cancelled out by higher fees, so compare the comparison rate and the fee schedule side by side. If you're adding an offset account, check whether it requires a package or an annual fee, because that cost needs to be weighed against the interest it saves you.
Costs Outside the Loan Itself
On top of the loan, you'll pay costs that sit outside it. The Australian Government does not cover a first home buyer's stamp duty, legal and conveyancing fees, inspection and valuation fees, mortgage registration fees or building insurance, even under Help to Buy.
These costs need to be in your first home buyer budget from day one. Our first home buyers guide walks through how to put that budget together.
How Much Does Stamp Duty Cost a First Home Buyer in Queensland?
In Queensland, an eligible first home buyer pays no transfer duty on an established home valued at $700,000 or under. Eligibility includes citizenship or residency requirements and moving in within one year of settlement. Above that value the concession tapers off, and it ends at $800,000.
For agreements entered into from 1 August 2026, each buyer claiming the concession must be an Australian citizen, a permanent resident or a specified foreign retiree. Queensland Revenue Office examples show a $730,000 home attracts $6,555 in duty, and an $850,000 home attracts $24,100. For a new home or vacant land to build your first home on, a full concession applies for contracts signed on or after 1 May 2025, with no price cap. The concessions cover residential land only.
The Queensland first home owner grant is $30,000 for eligible new homes valued under $750,000. It is not available for established homes. Check the current rules with the Queensland Revenue Office before you sign a contract.
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Book a chat with a Finance and Mortgage Broker at digilend today.
Is an Offset Account Worth Paying For? A Worked Example
An offset account is worth it only if the interest you save is more than the extra cost of having it. Here is an illustrative example using a rate of 6.75% p.a., not a quote.
Consider a first home buyer in Palm Beach with a $500,000 variable loan over 30 years. At 6.75% p.a., the repayment is about $3,243 a month. They keep $20,000 in an offset account linked to the loan, so interest is charged as if the balance were $480,000. In the first month that is about $2,700 in interest instead of about $2,813, a saving of roughly $112. Over a year, while the $20,000 stays put, that works out to about $1,350.
The outcome depends on one thing: the buyer needs to compare that saving with any fee attached to the offset feature. If the fee is lower than the interest saved, it pays off. If it's higher, a plain variable loan might suit them more. The rate will also move over time, which changes the figures. You can test your own numbers with our mortgage repayment calculator.
Can You Buy With a 5% Deposit and Avoid LMI?
Yes, eligible first home buyers can buy with a 5% deposit under the Australian Government 5% Deposit Scheme, and no lenders mortgage insurance (LMI) is payable. Housing Australia backs the lender for the part of the loan between your deposit and 20% of the property value.
The cost to watch is that the government backing protects the lender, not you, and you still pay all your normal loan costs and repayments. You must move in within six months of settlement and keep living there while the backing is active. If you don't, the lender may require you to pay LMI.
Applications go through a participating lender only. Housing Australia's published materials don't say which loan features, such as an offset account, are available under the scheme, so ask the lender before you apply. There are also property price caps. Palm Beach is on the Gold Coast, which Housing Australia lists as a regional centre with a $1,000,000 cap, but the cap for a specific property depends on its suburb and postcode in Housing Australia's postcode search tool.
How Much Can You Borrow Before You Start Looking?
Your borrowing capacity sets the price range you should be searching in, so check it before you go to open homes. Lenders assess your income, living costs and debts, and the result varies between lenders.
Try our borrowing capacity calculator for a starting figure. For a first home buyer, a pre-approval from a lender then gives you a clearer idea of what you can offer. A pre-approval is not a final approval, and it has conditions and an expiry date, so ask your broker how long it lasts.
Getting Your Fees Checked Locally
If you want a person to run through the fees with you, our Palm Beach team can compare loans from different lenders and show you the full cost of each one. We'll explain the trade-offs in plain language, including what a variable rate means if rates rise.
Call one of our team at digilend or book an appointment at a time that works for you, and let's work out what your first home loan will really cost.
Frequently Asked Questions
What fees can come with a variable rate home loan?
Fees depend on the lender and the product. Ask for the full fee schedule, including any application, ongoing or package fees and what it costs to pay out or switch the loan later.
Do first home buyers pay stamp duty in Queensland?
It depends on the home. An established home valued at $700,000 or under attracts no duty for eligible first home buyers, who must meet citizenship or residency requirements and move in within one year of settlement. A full concession applies to new homes and vacant land for contracts signed on or after 1 May 2025. Check current rules with the Queensland Revenue Office.
Can I buy with a 5% deposit without paying LMI?
Eligible first home buyers can use the Australian Government 5% Deposit Scheme, where no LMI is payable. You apply through a participating lender, and price caps and occupancy rules apply.
Is an offset account worth it on a variable rate loan?
It can be if the interest saved is more than any fee for the feature. In our illustrative example at 6.75% p.a., a $20,000 offset on a $500,000 loan saves roughly $1,350 a year in interest while the balance stays the same.
