What is the difference between a variable and fixed rate?
A fixed rate account will have the same interest rate for the lifetime of the loan, regardless of what increases or decreases occur in the market.
A variable rate account will have an interest rate which may increase and decrease in accordance with changes in the market.WARNING: YOU MAY HAVE TO PAY CHARGES IF YOU PAY OFF A FIXED LOAN EARLY.WARNING: IF YOU DO NOT MEET THE REPAYMENTS ON YOUR CREDIT AGREEMENT, YOUR ACCOUNT WILL GO INTO ARREARS. THIS MAY AFFECT YOUR CREDIT RATING WHICH MAY LIMIT YOUR ABILITY TO ACCESS CREDIT IN THE FUTURE.
What is an Internal Reference Rate?
The reference rate is an internal rate which we use to determine the borrowing rate on a loan. It includes the cost of funds to the bank, and administration costs for the set-up and maintenance of the loan.
Reference rates are only used for variable rate loans taken out after June 10th 2010.