Quick answer: when a fixed rate ends, the loan usually rolls onto the lender’s standard variable rate, which is often higher than new customers pay. Start looking at your options about six to eight weeks before expiry: ask your lender to reprice, compare other lenders, decide whether to fix again, and if you switch, time settlement for on or just after the expiry date to avoid break costs.
With the cash rate now at 4.60% after the September rise, many borrowers coming off fixed rates are facing a higher repayment. Doing nothing is a decision too, and often the most expensive one.
How much can repayments jump?
An example: a $600,000 loan with 25 years left, coming off a 5.89% fixed rate. Rates are illustrative; your lender’s actual rates will differ.
| Rate | Monthly repayment | Change |
|---|---|---|
| Fixed rate ending, 5.89% | ~$3,826 | — |
| Rolls onto a standard variable rate, 7.20% | ~$4,318 | +$492 a month |
| Competitive new variable rate, 6.30% | ~$3,977 | +$151 a month, about $341 less than rolling over |
The gap between the rate you roll onto and the rate a lender would offer a new customer is often where the real saving is.
Your four options
- Let it roll over. No paperwork, but you’ll often end up on a higher rate than you need to pay. Check the new rate in your lender’s letter against what new customers are being offered.
- Ask your lender to reprice. Many lenders will offer a lower rate to keep you, especially if your loan is under 80% of the property’s value and your repayment history is clean. It’s quick and avoids switching costs.
- Fix again. Certainty for another one to five years. Fixed rates already reflect where lenders expect rates to go, and fixed loans usually limit extra repayments and offset use. Fixed vs variable, explained.
- Refinance to another lender. Worth it when the saving clearly beats the switching costs. Use our refinance savings calculator to see the monthly saving and break-even.
A simple timeline
- 8 weeks before expiry: find your expiry date and current loan balance, and check your lender’s revert rate.
- 6 weeks before: ask your lender for its best retention rate in writing, and compare it with what other lenders offer.
- 4–5 weeks before: if switching, apply now so the new loan can settle on or just after the expiry date.
- Expiry: the new rate or loan takes effect, with no break costs if you’ve timed it after the fixed term.
Can you pass a new lender’s test?
A new lender assesses you at its rate plus a buffer of around 3%. After this year’s rises, some borrowers who could refinance easily two years ago now fall short. If that’s you, a repricing request with your current lender is often the most realistic way to cut the rate, and we can help you make it.
If the higher repayment will be hard to manage, act before you miss a payment. Your options and rights if repayments are tight.
Common questions
What happens when my fixed rate ends?
Unless you choose something else, the loan usually rolls onto the lender’s standard variable rate for that product, which is often higher than the rates offered to new customers. Your lender will tell you the new rate and repayment before the fixed term ends.
When should I start looking at options?
About six to eight weeks before the fixed term ends. That leaves time to ask your lender for a better rate, compare other lenders and, if you switch, settle on or just after the expiry date to avoid break costs.
Will I pay break costs if I refinance?
Usually not if the new loan settles after your fixed term ends. Leaving during the fixed term can trigger break costs, which depend on how rates have moved since you fixed. Ask your lender for a written quote.
Should I fix again?
It depends on how much you value certainty. Fixed rates already reflect where lenders expect rates to go, and fixed loans usually limit extra repayments and offset use. A split loan, part fixed and part variable, is a common middle ground.
Can I refinance if my borrowing power has dropped?
Possibly. A new lender assesses you at its rate plus a buffer, so higher rates can make switching harder. If you can’t pass a new lender’s test, asking your current lender to reprice is often the best option.
General information only, not financial or credit advice. Repayments are estimates for principal and interest on a $600,000 loan over 25 years at the rates shown. Lender rates, fees, break costs and policies vary.
