Fixed Rate Ending Soon? Here’s What You Should Do Next

Why You Shouldn’t Wait Until Your Fixed Rate Ends

One of the biggest mistakes homeowners make is assuming they’ll deal with their mortgage once the fixed period has already expired.

By then, your loan may have already moved onto a higher variable interest rate, and your new repayments could already be taking effect.

Taking action early gives you more time to:

• understand your options
• compare lenders
• negotiate with your current bank
• prepare any paperwork if refinancing becomes the best choice

Most lenders notify borrowers before their fixed period ends, giving you an opportunity to review your mortgage rather than making a rushed decision.

Think of that notice as a reminder to conduct a home loan health check, not as something to file away until later.

What Actually Happens When Your Fixed Rate Ends?

One of the biggest misconceptions is that your mortgage somehow “expires.”

It doesn’t. Only the fixed-rate period comes to an end.

Your home loan continues exactly as before, but the interest rate applied to your loan usually changes.

For many borrowers, the loan automatically moves to their lender’s standard variable interest rate, often referred to as the revert rate.

Your repayment amount is then recalculated based on:

• your remaining loan balance
• your remaining loan term
• your new interest rate

If the new interest rate is higher than your fixed rate, your monthly repayments will generally increase. For homeowners who fixed their loans during periods of historically low interest rates, this increase can sometimes be substantial.

That’s why reviewing your options before the change takes effect is so important.

Understanding the Revert Rate

The revert rate is the interest rate your lender applies after your fixed-rate period finishes, unless you arrange another option beforehand.

Many borrowers mistakenly believe they’ll automatically receive their lender’s most competitive variable rate. In reality, that’s not always the case.

Depending on your lender and current market conditions, the revert rate may be higher than the rates available to new customers or those who negotiate a revised loan.

This doesn’t necessarily mean your lender is treating you unfairly. Home loan pricing changes over time, and lenders regularly introduce new products and promotional rates to remain competitive.

Instead, use the period before your fixed rate expires to understand what your lender intends to offer and whether more competitive options exist.

Before You Decide, Understand Your Goals

Many homeowners immediately ask:

“Which option will give me the lowest interest rate?”

While that’s an understandable question, it isn’t always the right one. A lower interest rate is valuable, but it’s only one part of choosing the right home loan.

Before deciding what to do next, consider what’s changed since you first fixed your loan. Ask yourself:

Your answers may influence which option is most appropriate.

For example, someone focused on repayment certainty may still prefer a fixed rate, while another homeowner planning to make additional repayments could benefit from the flexibility of a variable loan.

Understanding your goals first makes it easier to choose the loan structure that supports them.

Your Five Main Options

When your fixed rate ends, you generally have five paths available. Each has advantages depending on your financial circumstances. We’ll explore each in more detail later in this guide, but here’s a quick overview.

The right choice depends on much more than today’s advertised interest rates. Your future plans, financial goals, property equity, and preferred level of flexibility should all be part of the decision.

Don’t Assume Your Current Loan Is Still the Best Fit

When you first fixed your home loan, it was probably the right decision based on your circumstances at the time. But life changes.

Perhaps your family has grown. Your income has increased. You’ve paid down a significant portion of your mortgage. Or your property has risen in value, giving you more equity than you had when you first took out the loan.

The lending market also changes. New loan products become available, lenders adjust pricing, and features such as offset accounts, redraw facilities, or flexible repayment options may now be more valuable to you than they were a few years ago.

That’s why the end of your fixed period is an ideal time to ask a simple question:

“If I were applying for a home loan today, would I choose the same one?”

If the answer is “probably not,” it’s worth exploring your options before your loan transitions to its next stage.

Option 1: Stay on Your Lender’s Variable Rate

For some homeowners, doing nothing may actually be the right decision. Once your fixed-rate period ends, your home loan will usually move to your lender’s variable interest rate. While many borrowers immediately assume they need to switch lenders, that’s not always necessary.

A variable home loan may suit you if:

• you want the flexibility to make additional repayments
• you’re planning to pay off your mortgage faster
• you value features such as an offset account or redraw facility
• you expect interest rates to remain stable or decline over time
• you’re planning to sell or refinance within the next few years

Variable loans generally provide greater flexibility than fixed-rate loans, allowing you to respond more easily if your financial circumstances change. However, flexibility comes with uncertainty. Because variable rates can move up or down over time, your repayments may also change.

The important point is this: Staying with your current lender should be a conscious decision, not simply the result of doing nothing.

Option 2: Negotiate With Your Current Lender

Many homeowners don’t realise they can negotiate with their existing bank. Lenders understand that attracting a new customer often costs more than keeping an existing one.

If you’ve consistently met your repayments and have built reasonable equity in your property, your lender may be willing to offer a more competitive interest rate to retain your business. A simple phone call could potentially save you thousands of dollars over the life of your loan.

What Should You Ask?

Before accepting your lender’s standard variable rate, ask questions such as:

• Is this the best interest rate available for existing customers?
• Are there any retention offers available?
• Can you match the rates currently being advertised?
• Are there lower-fee loan products available?
• Can I access an offset account or redraw facility?
• Would changing products involve any fees?

You don’t need to threaten to leave. Instead, approach the conversation prepared, informed, and willing to compare alternatives if necessary.

Why Negotiating Makes Sense

Negotiating allows you to:

• potentially reduce your repayments
• avoid refinancing costs
• keep your existing loan account
• minimise paperwork
• maintain your current banking relationship

Even if your lender can’t match another bank’s offer exactly, they may still provide enough value to make staying worthwhile.

Option 3: Fix Your Interest Rate Again

Some borrowers prefer knowing exactly what their repayments will be each month. If repayment certainty remains your highest priority, fixing your interest rate again may be worth considering.

This option may appeal to homeowners who:

• have a tight household budget
• prefer financial certainty
• are concerned about potential future rate increases
• don’t expect to make significant additional repayments

A new fixed-rate period can provide peace of mind by protecting you from interest rate increases during the agreed term.

However, remember that fixed-rate loans often come with trade-offs. Depending on the lender, they may limit:

• extra repayments
• access to redraw facilities
• flexibility if you decide to refinance or sell your property during the fixed period

Before fixing again, ask yourself whether certainty is more valuable than flexibility over the next few years.

Option 4: Consider a Split Home Loan

If you’re finding it difficult to choose between fixed and variable, you don’t necessarily have to choose only one. A split home loan allows you to divide your mortgage into separate portions.

For example:

• 50% fixed
• 50% variable

or another combination that suits your circumstances.

This approach allows you to combine:

• the repayment certainty of a fixed loan
• the flexibility of a variable loan

For many homeowners, it offers a balanced approach. If interest rates increase, the fixed portion remains protected. If rates decrease, part of your loan may still benefit. Likewise, you may still be able to make additional repayments on the variable portion while enjoying certainty on the fixed component.

Like any loan structure, a split loan isn’t automatically better. Its suitability depends on your financial goals and how you expect to manage your mortgage over the coming years.

Option 5: Refinance Your Home Loan

Sometimes the end of your fixed-rate period is the ideal opportunity to review the wider market. If another lender can offer a more suitable loan, refinancing may improve your financial position.

Refinancing isn’t simply about finding the lowest advertised interest rate. It may also provide access to:

• improved loan features
• lower ongoing fees
• multiple offset accounts
• better online banking tools
• more flexible repayment options

If your financial circumstances have changed since you first took out your mortgage, you may qualify for loan products that weren’t available to you previously.

Before refinancing, however, remember to compare:

• application fees
• valuation costs
• government registration fees
• discharge fees
• any applicable fixed-rate break costs

As discussed in our guide on How Refinancing Can Save You Thousands (And When It Doesn’t), the best refinance is one that improves your overall financial position after considering all associated costs.

Which Option Is Right for You?

There’s no universal answer. The right decision depends on your financial priorities.

Instead of asking, “Which option has the lowest interest rate?” consider asking, “Which option best supports the way I plan to manage my mortgage over the next few years?”

The table below provides a simple starting point.

Notice that each option focuses on a different objective. The “best” choice isn’t necessarily the one with the lowest advertised interest rate. It’s the one that aligns with your financial goals, repayment habits, and future plans.

Don’t Focus Solely on Interest Rates

It’s natural to compare home loans based on the interest rate. After all, a lower rate can reduce your repayments and save money over time. But interest rates don’t tell the whole story.

Imagine two loans. One has a slightly lower interest rate but charges ongoing package fees and doesn’t include an offset account. The other has a marginally higher interest rate but allows unlimited additional repayments, includes an offset account, and better suits the way you manage your finances.

For many homeowners, the second option may provide greater overall value.

That’s why it’s important to compare the complete package, including:

• loan features
• flexibility
• fees and charges
• customer service
• your future financial plans

The goal isn’t simply to secure today’s cheapest rate. It’s to choose a home loan that continues to work for you long after your fixed period has ended.

Your 90-Day Action Plan Before Your Fixed Rate Ends

One of the best ways to avoid feeling rushed is to start preparing before your fixed-rate period expires. Rather than waiting until your repayments change, use the final three months of your fixed term to review your options and make an informed decision.

Here’s a simple timeline to help you stay ahead.

Common Mistakes to Avoid

Many homeowners unintentionally increase their borrowing costs, not because they made the wrong decision, but because they didn’t make a decision at all.

Here are some of the most common mistakes to avoid.

Three Homeowner Scenarios

Frequently Asked Questions

Final Thoughts

The end of your fixed-rate period isn’t something to fear. It’s an opportunity. An opportunity to review your mortgage, reassess your financial goals, and ensure your home loan still meets your needs.

For some homeowners, the best decision will be to stay with their current lender. Others may benefit from negotiating a better rate, fixing again, choosing a split loan, or refinancing to a product that better suits their circumstances.

Rather than making a rushed decision, or no decision at all, take the time to understand your options before your fixed period expires. A proactive review today could help you reduce costs, improve flexibility, and ensure your mortgage continues to support your financial goals well into the future.

If you’re unsure which option best suits your circumstances, speaking with a mortgage broker can provide clarity. A broker can help you compare suitable loan options, explain the costs and benefits of each approach, and guide you through the decision-making process based on your individual needs.