A quick iam guide to these two common loan types. In general, variable rate loans offer more features and flexibility than other loans. As the name implies, the rate can change at any time as your lender raises or lowers the interest rate in line with the official cash rate. Fixed rate loans are set for a specified period, usually one to five years. They offer the advantage of knowing exactly what your repayments will be – offset by the disadvantage of not benefitting from any fall in rates.