It depends on what you are looking for. While the variable rate option offers lower rates and monthly payments initially, you risk paying a higher rate than the fixed rate option in the event that short term interest rates rise. The variable rate option has a rate cap, and you may be comfortable with this risk if you believe you will pay off the loan early or make enough money in the future to cover potentially higher payments. Fixed rates start out higher than variable rates, but interest rates do not change over the life of the loan. You may also want to consider a hybrid approach – a partial variable rate and partial fixed rate – to mitigate interest rate risk. To discuss your specific situation and/or the tradeoffs involved with these options, please contact our Customer Service team.