| Fixed Rate | Variable Rate |
| Definition:* Rate remain unchanged during the fixed term
* Term can be fixed for 1,2,3 or more years |
Definition:* Rate continually changing over loan lifetime
* Rate changed depending on RBA rate changing and lenders’ following decision |
| Advantage:* Borrower can benefit when on increasing rate
* Better budget as the repayment stay same in fixed term |
Advantage:* More flexible to divert to any product as market condition changing |
| Disadvantage:* Higher break cost
* Restriction of additional repayment |
Disadvantage:* Unsecured rate |
