• Fixed vs Variable Interest Rates Simplified by RAMS


    Fixed Rate Loans means that the interest rate on your home loan is secured for a term agreed with your lender. Variable Rate Loans change their rates based on market conditions.


    Greater Together is helping you understand the difference between fixed and variable interest rates. 

    If your home loan has a variable interest rate, the lender can increase or decrease the interest rate on your loan at any time.  This means your loan repayments will vary as your mortgage lender changes their rate.

    With a fixed interest rate loan, the interest will remain fixed for the term you choose.  This might be one year, it might be five years.  No matter how much variable interest rates change, your rate will stay the same, for that period of time. 

    Before deciding on a fixed rate loan, bear in mind that while it protects you from rate rises in the short term, you could also miss out on some savings if rates go down.  And if you decide to cancel or break your fixed

    rate contract, or make higher repayments than the lender allows before the end of the fixed-rate period, you may be charged significant fees, called break costs.

    Because there are pros and cons to both types of home loans, some people choose to split their loan into fixed and variable chunks.  This strategy gives you a mix of certainty and flexibility that may suit you best.

    Helping you understand your home loan options, it's why we're greater together.

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    About the author

    • Raymond

      Raymond A Ram is the RAMbassador for RAMS Financial Group. Raymond works with the RAMS team to bring simple, helpful and expert information on home loans and savings accounts to life with his down to earth and cheeky personality. He enjoys seeing everyday Australians turn their dreams of saving for a goal or getting into a home a reality. 

      Growing up in Goulburn, NSW, Raymond was brought up with good old-fashioned Aussie values of hard work and a fair go. It soon became apparent that Raymond wasn't content for the conventional path of grazing, producing the very best wool, and finding a nice sheep to settle down with. So it wasn't long before his passion for performing and his talent as a likeable larrikin shone through - landing him a few roles such as 'RAMlet'. He was even tipped to play RAM-bo at one point but chose to become star of the small screen instead as RAMbassador for RAMS. He now finds this role so much more rewarding.

      Contact your local RAMS Home Loan Centre about your home loan options.

      Raymond A Ram

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  • Disclaimer:

    This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information to your own circumstances and, if necessary, seek appropriate professional advice.