A variable interest rate is a rate that fluctuates according to market conditions. Sometimes known as a floating interest rate.
So, this means that the variable interest rate that you are paying today may be different in 6 or 12 months time.
A fixed interest rate is a rate that is not subject to market condition fluctuations, but only for a set period of time. When you choose a fixed rate, your rate will not change for the fixed period.
A fixed interest rate can give some assurance when it comes to knowing what your loan repayments will be over the set term, but it also may come with the disadvantage that if variable rates drop, your fixed rate and repayments will stay the same for the set term.
Check out Greater Bank's full range of current fixed and variable home loan interest rates below.
No one loan is perfect for everyone.
At Greater Bank, we understand that every one of our valued customers have different needs and are at different stages in their lives.
The right loan for you depends on these needs.
A variable rate loan means that the interest rate on the loan may go up and down over the loan period. This allows you to make additional or early repayments to take advantage of interest rate fluctuations.
A fixed rate loan means that the interest on the loan remains constant over a fixed period, so your repayments will stay the same. You will be able to budget for your repayments and are protected from rises in interest rates.
Still have questions? Contact a friendly Greater Bank staff member on 13 13 86 or visit your nearest branch.
We understand your circumstances may change which might require you to payout your loan completely or change your fixed rate loan by changing the loan type.
However to do so, you need to ‘break’ the terms of your loan contract. A break cost fee is intended to recover any loss that Greater Bank will incur when a customer breaks their fixed rate contract; which can happen as a result of changes in interest rates.
A break cost fee may be payable if the loan is repaid before the end of the fixed rate period, or if you switch to another loan type during the fixed rate period e.g. from a fixed rate to a variable rate.
The break cost fee is an estimate of the interest we should have received for the rest of the fixed rate period compared to the interest we would receive if we relend those funds.
We compare the interest rate you locked into the equivalent current interest rate based on the time remaining on your fixed rate period.
If fixed interest rates have increased since you locked in your fixed rate, it’s quite possible that you won’t be charged a break cost fee.
We only charge a break cost fee if we will incur a loss as a result of you breaking your fixed rate loan.
A simple version of the break cost formula is:
Break Cost = Loan Balance Owing x Interest Differential x Remaining Fixed Period
Simple example break cost calculations
The interest charged depends on a variety of factors, such as the number of days in that month, the applicable annual interest rate and the unpaid balance of your loan.
Interest is calculated on the unpaid daily balance of your loan and is charged to the loan on a monthly basis (depending on which product you have).
The interest rate applied each day is equal to your annual interest rate, divided by 365.
A comparison rate combines the:
The comparison rate can help you estimate the total cost of a loan over a year.
