Variable rate loans vs fixed-rate loans

A fixed-rate loan has the same interest rate for the entire term of the loan, whereas the interest rate for a variable rate loan may increase or decrease during the term of the loan If your interest rate changes, you will receive a notification — either in your monthly statement or a separate notice. Changes in your loan interest rate does not impact the amount of your ordinary monthly repayment, only your final repayment. When interest rates increase, this may increase your final payment, and when they decrease, reduce it.