Variable Interest Rate Loan, Fixed Interest Rate Loan

Variable Interest Rate Loan

Summary	Fluctuates during the loan period according to the interest rate changes made by the Reserve Bank
Ideal for	Not to worried about market fluctuations and may want the flexibility of making extra repayments.
Advantages	Unlimited additional repayments, 100% offset facility, redraw. Decrease in the interest rate by RBA reduces your monthly repayment.
Disadvantages	Increase in interest rate by RBA increases your monthly repayment.

Fixed Interest Rate Loan

Summary	Interest rate remains uniform during the loan period. Fixed interest rate loans are generally available from 1 to 5 years.
Ideal for	People who wants the stability of a set monthly repayment.
Advantages	Repayments are not affected by any rate increases during the loan period.
Disadvantages	If interest rate falls you will not gain the benefit of lower repayments. Penalties apply for breaking the contract within the fixed period. Restricted lump sum repayments. Restricted offset accounts.