Fixed Rate (Asset Finance)
Fixed Rate in asset finance means your interest rate stays the same for the entire loan term. Your repayments never change, regardless of market rate movements.
Fixed rates are commonly used in Vehicle Finance, Equipment Finance, Low Doc Asset Finance, Chattel Mortgage, and Hire Purchase facilities.
Why It Matters
A Fixed Rate protects you from interest rate rises. Your repayment schedule remains constant, which helps with:
- cashflow stability
- budget forecasting
- avoiding repayment shocks
- long-term planning for business assets
Most Australian businesses choose fixed-rate structures when financing vehicles, trucks, machinery, or tools.
How It Works
- The lender locks in your rate at settlement.
- Your monthly repayment is calculated at that rate.
- The repayment amount stays exactly the same for the full term.
- Even if the RBA or bank rates increase, your repayment doesn’t change.
Fixed rates are compatible with Balloon Payments and Residual Values on leased assets.
Common Use Cases
- Financing a ute, van, or truck for a predictable monthly cost
- Financing heavy equipment (excavators, skid steers, forklifts)
- Low Doc loans where stability is important
- Businesses wanting certainty for long-term budgeting
Related Switchboard Resources
For economic rate insights, visit ato.gov.au.
Are most asset finance loans fixed rate?
Yes — the majority of vehicle and equipment loans in Australia are fixed rate for stability.
Can a fixed rate change later?
Not after settlement. The only time a rate may change is before the loan is finalised.
Does a fixed rate limit my loan features?
Generally no — fixed rates work with balloons, residuals, and most commercial asset loan structures.