Fixed Rate vs Variable Rate

Auto Loan / Financing goes beyond just interest / profit rates and repayment/payment tenure. Choosing between a Fixed Rate or Variable Rate can shape your monthly instalments/repayments and have a lasting impact on your long‑term financial peace of mind.

To help you make a smart, informed and confident decision, we have created a simple comparison table that highlights the key differences – giving you the clarity you need to choose the financing option that best suits your financial needs.

Fixed RateVariable Rate
Overview:
  • Interest/profit rate remains the same throughout the loan/financing term
  • Monthly instalment/payment will not change until completion of financing
Overview:
  • Interest/profit rate fluctuates as Overnight Policy Rate (OPR) (that affects Base Lending Rate / Base Financing Rate (BLR/BFR)) changes
  • Monthly instalment/payment amount will increase or decrease, based on OPR movement

Benefit:
Act as a protection against rising interest/profit rates.

Benefit:
Potential for lower interest/profit rate in the event of a drop in OPR percentage, which translates to lower instalment/payment and lower interest/profit paid.

Who it is for?
  • Those who plan out their budget with discipline, expecting their financial stance to be completed with predictability and stability.
Who it is for?
  • Those who can manage fluctuating instalment/payment and prefer the flexibility of market responsiveness, in exchange for potential interest/profit savings.

Illustrative scenario

Mr. A signs a RM 50,000 auto loan/financing, for 9 years tenure at fixed effective interest/profit rate of 7.17% p.a.

Monthly instalment/repayment remains as RM630.00 throughout the 9 years’ tenure.

Illustrative scenario

Ms. B signs a RM 50,000 auto loan/financing, for 9 years tenure at variable effective interest/profit rate of 7.17% p.a.

Between 1st & 2nd year of the loan/financing, there is no change to OPR, and monthly instalment/repayment remained the same at RM630.00

On 3rd year, OPR is reduced by 0.25%, and thus BLR/BFR* is adjusted downward. This result to decrease in interest/profit rate, and the monthly instalment/repayment revises to RM 624.00

Note:

The results generated by this calculator are for informational purposes only and do not constitute financial advice. While we strive to provide accurate information, AmBank/AmBank Islamic is not responsible for any errors or omissions in the calculations.

*The Base Lending Rate / Base Financing Rate (BLR/BFR) is set as the Overnight Policy Rate (OPR) decided by Bank Negara Malaysia. The BLR/BFR can rise or fall due to changes in the OPR. For historical series of base rate/reference rate, please refer to our website .

 

You're leaving AmBank

Please note that AmBank's privacy policy does not apply to linked websites. We do not endorse their content and cannot be held responsible for any losses incurred from accessing or transacting on them.
Accept