Can I Change My Personal Loan from Fixed to Variable?

Are you feeling trapped by your fixed-rate personal loan? Many Australians initially opt for fixed rates to enjoy the stability of predictable monthly payments. However, as interest rates fluctuate, you might find yourself longing for the flexibility of a variable rate. Can you make the switch, and more importantly, should you?

Understanding Fixed and Variable Personal Loans

Before you decide to change your loan type, it's essential to understand the differences between fixed and variable loans. A fixed-rate loan locks in your interest rate for a specific period, offering predictable repayments and protection against rate hikes. Conversely, a variable-rate loan fluctuates with the market, potentially saving you money if rates drop, but posing the risk of increased repayments if rates rise.

Current Market Rates and Options

As of 2026, the Australian personal loan market offers a variety of rates. Fixed rates typically range from 6.49% to 9%, whereas variable rates fluctuate between 6% and 12% depending on the lender and your creditworthiness. Each option comes with its own set of requirements and benefits.

Loan Type	Interest Rate Range	Features
Fixed Rate	6.49% - 9%	Stable repayments, protection from rate increases
Variable Rate	6% - 12%	Potential savings if rates fall, flexibility in repayments

How to Change Your Personal Loan from Fixed to Variable

Switching from a fixed to a variable rate can be a straightforward process, but it's crucial to approach it carefully:

1. Review Your Loan Contract: Check your current loan agreement for any terms regarding switching rates. Look for any exit fees or penalties.
2. Compare Lenders: Use Esteb and Co's access to 83+ lenders to explore competitive variable rate options that suit your needs.
3. Calculate the Costs: Factor in any fees associated with breaking your fixed rate and weigh them against potential savings from a variable rate.
4. Consult a Professional: Talk to a mortgage broker from Esteb and Co to understand the implications and benefits of switching.
5. Apply for the Switch: Once you've made an informed decision, submit an application to your chosen lender for the rate change.

Tips and Considerations

• Future Rate Predictions: Consider economic forecasts and whether rate hikes or cuts are expected.
• Budget for Uncertainty: Ensure your budget can accommodate potential rate increases with a variable loan.
• Consider Partial Fixes: Some lenders offer loans that allow a portion of your debt to remain fixed while the rest is variable.
• Check Your Lender’s Policy: Some lenders may not permit changes from fixed to variable during the loan term.

Frequently Asked Questions

• Can I switch from a fixed to a variable rate at any time? Generally, yes, but you may incur fees, and it's subject to your lender's terms.
• Will I save money by switching to a variable rate? It depends on market trends and your current rate. Consult with a broker to evaluate potential savings.
• Are there any penalties for switching loans? Yes, exit fees or break costs may apply, so it's crucial to factor these into your decision.
• How can I find the best variable rates? Use Esteb and Co's extensive network of 83+ lenders to compare and find competitive rates.
• What happens if interest rates rise after switching to a variable loan? Your repayments will increase, so it's important to ensure your budget can handle such fluctuations.
• Can I switch back to a fixed rate later? This depends on your lender's policies and the terms of the new variable loan you select.