The flat rate is I believe a simple interest calculation in NIB, ie what interest rate for the period of, say, 5 years at a simple interest term. Not really relavent to any borrowing calculation. What is more important is the APR.
As with any personal loan, be aware that on average 3 year loans are paid of in 18months - i.e. people take out a loan for say 5 years, with low monthly repayments to tide them over until their circumstances improve, and then pay off the balance. This is also particularly relavent with respect to car loans where the loans are typically paid off when the car is sold. The message is, if you think you are going to repay early, or accelerate payments, then variable rate is more useful.
Final point, variable rate loans don't get impacted by rising rates to the same extent as mortgages as a larger portion of your payments are capital on a shorter term.