Variable rate loan
The interest rate on this type of loan is not fixed and will fluctuate when the Reserve Bank changes rates and the banks follow suit. There is more flexibility in this loan, allowing you to make extra payments without penalty to reduce interest and the length of your repayments. It can work against you if interest rates were to rise though, as you could end up paying more. A popular feature of this type of loan is the ability to put all of your money into your loan to reduce interest, and then redraw at any time that suits you.
Fixed rate loan
This style of loan involves fixing the interest rate of your loan for a set term. This is usually one to five years but can be up to 15 years and is usually preferred by people who would like the security of always knowing what their repayments will be. There are downsides to fixing your rate though, as you could end up paying more if interest rates decrease.
A split rate loan is a combination of a variable and fixed rate loan, meaning that if interest rates rise or lower, the percentage of the fixed aspect will remain the same rate. This can be selected as a lower risk than variable but can still lead to paying more if interest rates drop.
This is an account that is identical to a normal savings account but sits side-by-side with your home loan account. Essentially the amount of money you have sitting in your offset account will reduce the overall principal amount that you will pay money on, saving you in the long run. For example if you have a $200,000 loan but $20,000 in your offset account, you will be charged interest on $180,000 only. The more money in this account, the better off you are.