Fixed Loans vs Variable Loans | Nifty Loans Investigates

Fixed Loans vs. Variable Loans

There is no way you can see into the future and predict whether you will be better or worse off with fixed loans or variable loans, because no-one knows what will happen with the economy and interest rates.

However, you can make an educated guess based upon your situation and future plans as to whether a variable or fixed loan interest rate might be right for you.

The difference between fixed rates and variable rates

In the case of a variable loan, the interest rate that is charged on your loan varies as the market fluctuates. Consequently, a fixed loan’s interest rate is where the rate of interest remains a fixed rate during the term of the loan.

Which one is better?

The benefit of a fixed rate is that it allows the borrower to predict future repayments no matter what interest rates do. Generally, if interest rates are low but could increase it would probably be better to lock the loan in with a fixed interest rate.

If interest rates are lowering, then it might be better to have a variable interest rate, because as the variable interest rates fall, so too will your loan interest rate. Even so, fixed loan rates protect borrowers from sudden increases in mortgage repayments, are easy to understand and tend to be similar among most lenders.

The other side of fixed loans rates is that when interest rates are high, qualifying for a loan is harder because the repayments are larger.

Fixed loans rates are usually between 15-30 year terms, with smaller monthly interest rates. However, this leaves the consumer paying a much greater amount of interest because it takes them longer to pay off the principal amount of their loan within the 30-year term.

Shorter-term mortgages can cost a lot less overall.

Which rate should I choose?

Variable loan rates can be more complex than fixed loan rates because there are many factors that can cause your rate to fluctuate – with most of them out of your control.

Some find them appealing because they offer lower initial payments. However, your monthly interest rate can change significantly and are often structured to double within a few years.

You need to decide which is the right interest rate for your situation.

Some questions you should be asking yourself are:

  • Do you have a large mortgage payment?
  • Can you afford to repay the mortgage as well as interest?
  • What if interest rates rise? Will you still be able to afford your mortgage?
  • Is this your forever home or will you likely move within the foreseeable future?
  • Are interest rates on the way up or down?

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Pros and cons of variable and fixed rates

Variable rates


  • You can make extra repayments whenever you like
  • It offers more features, like unlimited redraws, savings on interest with offset accounts, etc.
  • Easier to switch loans if your situation changes


  • Makes budgeting harder
  • Mortgage stress if the rates rise and you are unprepared
  • Mortgage repayments fluctuate each month

Fixed rates


  • Fixed loan rates can make budgeting very easy and allows consumers to plan ahead
  • Rate rises won’t affect you


  • Rate drops won’t apply to you
  • Limits on extra repayments – additional payments are often not allowed or capped at a low amount or you could be charged a fee
  • A redraw facility may not be offered
  • You may be charged break fees on fixed loan rates if you change or payoff your home loan within the fixed rate period

How do I decide on the best home loan rates for my family?

If you are still feeling unsure whether fixed loans or variable loans are right for your needs, it may be time to consult a mortgage broker. They can give you plenty of advice on who has the best interest rates for fixed loans and variable loans and they can do all the shopping around for you!

However, ensure you get a written quote or contract that outlines their fees, as many mortgage brokers’ fees will often be wrapped up in your new home loan, which isn’t a problem but being aware that they are being paid by the lender for referring your business.

Looking for a personal loan?

Great! Nifty Loans offer fast personal loans starting at $500 and going up to $10,000. The repayment period depends on the amount you decide to borrow.

At Nifty, we know when you’re looking for cash, it’s usually quickly. So, that’s why it only takes a few minutes to complete our application, and you could receive an outcome in 60 minutes* (if you apply during business hours). We think that’s pretty speedy! Read on to learn more about the personal loans we offer.

What personal loans do we offer?

At Nifty Loans, we require a reason for your loan when you apply. To help you along with your application, here are a few reasons why you could apply for a quick personal loan:

And the list could go on! If you have any questions about what you can or cannot apply for, contact our team at or give us a call on 1300 471 328.

Who is eligible for a personal loan?

Before you apply for a quick loan, there are a few requirements to meet.

To apply, you must:

  • Be over 18 years old
  • Be an Australian citizen
  • Have a regular income for at least 3 months in a personal bank account
  • Have an active mobile and email address
  • Have an Internet banking account

That’s it! Just a few requirements to meet before you can apply for quick loans! Super easy, right?! Well, if you’re ready to apply, just scroll up and get started with our loan calculator.

No paperwork loans! 

That’s right. At Nifty, you won’t have to fill out any paperwork whatsoever when you apply for a personal loan. Almost everything is online nowadays, why should a personal loan be any different? We won’t even ask you to submit paper copies of your payslips or bank statements because it can all be done online. Our 100% online application form makes the process simple and straightforward. At Nifty, we know your time is precious so we won’t waste any of it. Our team will do the hard work so you can get back to doing what you do best. 

Honest and transparent 

At Nifty, we believe in honesty and transparency. We do not do hidden fees or charges. The entire terms and conditions of your loan, as well as any fees that could incur for failed payments, will be clearly outlined in our agreement. We encourage all borrowers to carefully read through their contract before signing anything. Our team is always here to assist you. So, if you’ve got questions, just ask us! We’ll do our best to clear up any queries you might have, as quickly as possible.

Ready to apply?

Now that you understand the difference between fixed loans and variable loans, and you now know a little more about personal loans – you’re ready to apply. Just scroll up and begin with our loan calculator, then once you’ve decided how much to borrow and for how long, you’ll be taken to our application.

How do I know if I have bad credit? Nifty has the low down.

Finance Nifty
Finance Nifty