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Fixed vs Variable Loans

Fixed vs Variable. Which is best for you, well the answer is it depends on your individual circumstances. We’ve prepared a brief article to explain the difference.

What is a fixed interest rate?

A fixed interest rate loan is a loan where the interest rate doesn’t fluctuate during the fixed-rate period of the loan. This allows the borrower to accurately predict their future payments. Fixed rates may be available for a term of 1 to 5 years.


  • Provides certainty on loan repayments.
  • Will save you money if variable interest rates go up.


  • Will cost you more if interest rates go down.
  • It may cost you more if you decide to switch to a variable loan in future.

What is variable interest rate?

A variable interest rate is an interest rate on a loan that fluctuates (up or down) over time because it is based on an underlying cost of funds to the lender that changes periodically.


  • Will save you money if the interest rate goes down.
  • May have additional loan features that provide flexibility.
  • Can be easier to switch loans in future.


  • Is subject to changes in interest rates, up or down.
  • Additional loan features can cost you more over the life of the loan.

Can you get a combination of both?

Yes. In this scenario, you can split part of your loan into a fixed rate, and the remainder as a variable rate. Once again, split loans have pros and cons which you should consider before you select the loan that’s best for you.

Need help securing a loan?

Talk with our friendly team about your loan requirements, call 1300 785 149 or complete our enquiry form.

DISCLAIMER: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone.  If expert assistance is required, professional advice should be obtained.

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