The interest rate charged on a variable loan moves up or down in accordance with movements in interest rates, as set by the Reserve Bank which are most often closely followed by the lenders. Basic variable loans generally have fewer loan features than a standard variable loan. Basic variable loans are suitable if you are looking to pay off a consistent amount over the full term of the loan, but are not suitable if you are looking to pay off your mortgage quickly.
For example, on variable home loan your repayments are based on lenders current variable rate. The repayments will change based on the movements in interest rates.