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# Fixed vs Variable Interest Rate Calculator

This simulator allows you to analyse the choice of a fixed or variable rate by modeling changes in the variable interest rate and comparing the amount repaid during the period and the outstanding loan balance at the end of the period.

 Enter the period over which you wish to compare loans: --SELECT-- 1 year 2 years 3 years 4 years 5 years

Predicting where interest rates are heading is not an easy task. The simulator allows you to adjust the variable interest rate every quarter to simulate whether you would be better off with a fixed or variable interest rate.
 Please enter the following details: years % %
* Note, the term of the loan can be longer than the fixed period you have selected. For example you may be taking out a 25 year loan but only analyse the first three years. The shorter the term of the loan the higher your repayments will be.
You can now enter how you expect the variable interest rate to change over the period:

### About Fixed vs Variable Interest Rate

One of the major choices to be made when choosing a home loan or a loan on a residential investment property is whether to take a variable interest rate or a fixed interest rate.

A fixed interest rate will not change during the fixed period. During the fixed period the borrower knows their repayments will remain unchanged.

A fixed rate loan is also advantageous if variable interest rates rise. When variable interest rates rise a borrower with a fixed interest rate is relatively better off because their rate will remain unchanged.

Conversely if interest rates fall a borrower with a fixed interest rate is relatively worse off because they do not benefit from the fall in variable rates.

A variable home loan interest rate should move up and down with market interest rates. The main determinant of variable home loan interest rates is the cash rate set by the Reserve Bank of Australia. When the Reserve Bank alters the official cash rate, most variable home loan interest rates change by a similar, if not identical, amount.

Home loans with a variable interest rate usually have the highest repayment flexibility. The norm is that the borrower can pay out their loan without penalty.

The Fixed or Variable Interest Rate Simulator allows the borrower to analyse the choice of a fixed or variable rate by modelling changes in the variable interest rate and comparing the amount repaid during the period and the outstanding loan balance at the end of the period.

## Mortgage Calculators

Using an online home loan calculator or mortgage calculator is the most convenient way to help you assess your mortgage payment options. Choose any of our 17 easy-to-use interactive calculators and tools below to help you model any complex mortgage and investment related scenarios.

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Wednesday Apr 26, 2017
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