A fixed interest rate will not change during the fixed period. During the fixed period the borrower knows their repayments will remain unchanged. A fixed rate loan is advantageous if variable interest rates rise. When variable interest rates rise, a borrower with a fixed interest rate is relatively better off because their rate will remain unchanged.
A variable home loan interest rate moves up and down with market interest rates. One of the determinants of variable home loan interest rates is the cash rate set by the Reserve Bank of Australia. When the Reserve Bank alters the official cash rate, most variable home loan interest rates change by a similar amount, however it is important to note that there are many other factors that affect your interest rate.
Conversely if interest rates fall a borrower with a fixed interest rate is relatively worse off because they do not benefit from the fall in variable rates.