When a fixed-rate home loan ends, the mortgage normally moves to the next applicable rate or loan structure under its terms, unless you’ve arranged something else. For borrowers coming off a low fixed rate, this can mean a real jump in repayments. Preparing 30 to 60 days before the fixed period expires gives you time to compare your options, work out the likely repayment change, and talk it through with your lender before the new rate actually kicks in.
What Happens When Your Fixed Rate Ends?
When the fixed period ends, the lender generally moves the loan to the applicable variable rate, or to whatever rate is specified in your loan terms, unless you arrange something different. If you don’t take any action, this is what happens by default, so it pays to check your loan documents rather than assume the repayment will stay the same.
The exact outcome comes down to your specific loan contract and lender, so contact them early to confirm what applies to you.
Before the fixed period expires, check:
- The exact fixed-rate expiry date
- The rate that will apply afterwards
- Your estimated new repayment
- Remaining loan balance
- Remaining loan term
- Available loan features
- Any refinance or switching costs
- Whether you can re-fix or change loan products
If the projected repayment is a lot higher than what you’re paying now, start comparing options before the fixed term actually ends.
Why Can a Fixed Rate Expiry Increase Mortgage Repayments?
A fixed-rate period protects you from interest rate changes during that period. Once it ends, the loan may move to a variable rate, and if that rate is higher than your old fixed rate, the interest portion of your repayment goes up.
How much it changes depends on:
- Outstanding loan balance
- New interest rate
- Remaining loan term
- Repayment frequency
- Loan type
- Loan features
- Whether you’re making additional repayments
This is why a fixed-rate cliff is worth planning for in advance, rather than sorting out at the last minute.
What Are the 4 Options When a Fixed Rate Ends?
Australian borrowers generally have four main options when a fixed-rate period expires:
- Re-fix the loan
- Roll over to the applicable variable rate
- Refinance to a new lender
- Ask the existing lender for a retention discount or better rate
Which one makes sense for you comes down to your financial position, the rates on offer, your loan features, and what it would actually cost to make a change.
1. Re-Fix Your Home Loan
Re-fixing means entering a new fixed-rate period with your existing lender, based on what they currently have available and whether you meet their eligibility criteria. It gives you repayment certainty for the new fixed term.
Potential Advantages
- Greater repayment certainty
- Protection from variable-rate increases during the new fixed period
- Easier household budgeting
- No need to change lenders if the existing lender’s terms suit you
Potential Disadvantages
- You may miss out if variable rates fall later
- The new fixed rate might not be lower than your current one
- Fixed loans can restrict additional repayments
- Changing a fixed loan early can come with costs
Before re-fixing, compare the offered rate against the lender’s variable option and anything else available on the market.
2. Roll Over to a Variable Rate
You can let the loan move to the applicable variable rate if your loan terms allow it. A variable loan can offer more flexibility than a fixed one, particularly if it includes additional repayments, redraw or an offset account.
Potential Advantages
- More flexibility, if the loan has the right features
- You benefit if variable rates fall
- Easier access to some loan features
- No need to commit to another fixed period
Potential Disadvantages
- Repayments can change
- Future rate movements are uncertain
- Budgeting gets harder if repayments rise
If you’re planning to stay on a variable rate, it’s worth calculating your repayment under a few different rate scenarios rather than just going off the starting rate. And if you’d rather switch before the fixed term actually ends, check whether break costs apply first, since they can outweigh the benefit of switching early.
You can review Post Your Loan’s home loan options when comparing different loan structures and features.
3. Refinance to a New Lender
Refinancing means replacing your current mortgage with a new one, potentially from a different lender. It’s worth considering when your existing loan no longer stacks up on rate, fees or features.
Potential Advantages
- Access to different loan products
- Potentially lower interest rate
- A different repayment structure
- Features that may suit you better
- A chance to review the whole mortgage, not just accept the post-fixed rate
Potential Disadvantages
- New lender assessment
- A property valuation may be required
- Application and switching costs may apply
- You’ll need to meet the new lender’s criteria
- The new loan may come with different features or conditions
A simple way to sanity-check refinancing: expected annual interest saving, minus the annualised cost of switching, gives you a rough estimate of the annual benefit. It’s also worth checking the loan term. If refinancing stretches the loan out longer than your current remaining term, your monthly repayment can drop while the total interest you pay over the life of the loan goes up. So compare the full picture, not just the advertised rate. Post Your Loan’s refinancing options can be a useful starting point for that comparison.
4. Request a Retention Discount
You don’t necessarily need to change lenders to get a better deal. Contact your existing lender before the fixed term expires and ask whether they can offer a more competitive rate or retention pricing.
They may take into account your repayment history, loan balance, property value and your overall relationship with them when deciding what to offer, but the result varies from lender to lender.
What to Ask Your Lender
Worth asking, ideally in writing:
- When exactly does my fixed rate expire?
- What rate will apply afterwards, and what’s my estimated repayment?
- Can I re-fix, and what fixed-rate terms are available?
- What variable-rate options do you have?
- Is there a retention discount on offer?
- Are there any fees for changing products?
- Can I make additional repayments, and is an offset or redraw available?
- Are there discharge or break costs if I refinance elsewhere?
Getting clear answers before expiry gives you something solid to compare the four options against.
Stay on Variable vs Re-Fix vs Refinance: Comparison
|
Option |
Pros |
Cons |
Best For |
|
Stay on Variable |
Greater flexibility; may benefit if variable rates fall; may offer offset and redraw features. |
Repayments can change; future rates are uncertain. |
Borrowers who value flexibility and can handle some repayment movement. |
|
Re-Fix |
Greater repayment certainty; easier budgeting during the fixed period. |
Less flexibility; may miss future variable-rate falls; fixed-loan restrictions may apply. |
Borrowers who want predictable repayments. |
|
Refinance |
Chance to compare lenders, rates and features; may improve the overall loan structure. |
New lender assessment; possible application, valuation and switching costs. |
Borrowers whose current loan isn’t competitive anymore. |
There’s no option that automatically suits everyone. It comes down to weighing up rate, repayment, fees, remaining term, features, and how much change your budget can absorb.
When Should You Start Preparing for a Fixed Rate Expiry?
Start 30 to 60 days out. That gives you enough time to understand the new repayment, talk to your lender, and look into refinancing without waiting until the loan has already rolled over. If your lender sends an expiry notice earlier than that, or allows earlier discussions, start sooner. The earlier you know your estimated post-fixed repayment, the easier it is to spot a shortfall before it becomes a problem.
30 to 60 Day Fixed Rate Expiry Checklist
60 Days Before Expiry
- Confirm the expiry date: check your loan documents or lender communication.
- Check the post-fixed rate: find out what rate applies once the fixed period ends.
- Calculate your estimated repayment: compare it against what you’re paying now.
- Check your outstanding balance: a lower balance softens the impact of a rate change.
- Review your loan features: offset account, redraw, additional repayments, flexible repayment frequency, and anything else specific to your lender.
45 to 30 Days Before Expiry
- Speak to your current lender: ask about re-fixing, variable options, retention discounts, and any other product changes available to you.
- Review your household budget: work out whether it can handle the expected repayment, and if there’s a gap, identify it now rather than later.
- Compare refinancing options: if your lender’s offer isn’t competitive, look at alternative loans and work out the full cost of switching, including discharge, application and valuation fees.
30 Days Before Expiry
- Put the three main paths side by side: current lender variable, current lender new fixed period, and refinancing elsewhere.
- Check your borrowing position: a new lender will look at your income, expenses, debts and credit profile.
- Make your decision before the fixed period expires: don’t leave it to the last few days if you’re planning to refinance or restructure.
How Can You Prepare for a Fixed Rate Cliff?
A fixed-rate cliff is the sharp jump in repayments that can happen when you move from a comparatively low fixed rate to a much higher rate once the fixed period ends. A few practical ways to prepare:
Build a repayment buffer. If your budget allows it, setting aside extra funds before the fixed period ends gives you some breathing room.
Test a higher repayment. Calculate what your mortgage would cost at a higher rate to see whether your current budget could actually absorb it.
Reduce other high-cost debt, where it makes sense. Cutting down existing debts can free up monthly cash flow and may improve your position if you’re applying for a new loan. If you’re weighing this up, it’s worth reading what debt consolidation means before folding other debts into your mortgage.
Be careful extending the loan term. A longer term can lower your monthly repayment, but it can also mean paying more interest overall, so it’s worth checking the total cost, not just the monthly figure.
What If You Cannot Afford the New Mortgage Repayment?
If the new repayment looks like it’ll cause real financial difficulty, contact your lender before you miss a payment. Explain your situation and ask what assistance or options are available. Don’t wait until the loan is already in arrears if you can see the problem coming. Lenders generally have more options available the earlier you raise it, whether that’s adjusting the loan structure, hardship assistance, or pointing you toward financial guidance.
Can Debt Consolidation Help After a Fixed Rate Ends?
This isn’t one of the four core options above, but it’s worth knowing about if you’re carrying other debt alongside your mortgage. Debt consolidation combines eligible debts into a single loan structure, subject to what your lender will approve.
It can simplify your repayments, but it also turns shorter-term debt into debt secured against your home, and can extend how long you’re paying it off. If you’re considering it, compare the new loan balance, interest rate, monthly repayment, loan term, total interest, fees and the security you’d be putting up.
Final Takeaway
A fixed-rate expiry is a good prompt to review your mortgage before the new repayment takes effect. Start 30 to 60 days early, confirm the post-fixed rate, work out the repayment change, and weigh up re-fixing, staying variable, refinancing or negotiating with your current lender.
The right call comes down to the full picture: total cost, repayment structure, fees, features and how much change your budget can handle, not just the headline rate.
FAQ
Check the rate that'll apply afterwards, work out the new repayment, and compare re-fixing, moving to variable, negotiating with your current lender, and refinancing elsewhere.
It's worth considering if another loan offers a better combination of rate, fees, repayment and features, but weigh the potential savings against all the switching costs first.
Start 30 to 60 days out. Work out your expected new repayment, check it against your budget, ask your lender about discounts, and compare your options before the expiry date arrives.
It depends on your circumstances, how much repayment certainty you want, and the rates on offer at the time. Re-fixing gives you certainty; variable gives you more flexibility but exposes you to future rate changes.
Yes. Ask your existing lender whether they can offer a more competitive rate or retention pricing, then compare that against re-fixing, variable and refinancing alternatives.
You can, but break costs or other charges may apply. Ask your current lender for the payout figure and weigh it against the expected benefit of refinancing early.
Start looking 30 to 60 days out, or earlier if your lender allows it. Refinancing involves documentation, assessment and settlement, so leaving it to the last minute adds unnecessary pressure.
It may, if the applicable post-fixed rate is higher than your old fixed rate. How much depends on your balance, the new rate, your remaining term and loan structure.
It can. If the new loan term is longer than what's left on your current mortgage, your monthly repayment may go down while the total interest you pay over time goes up.
Some loans offer offset accounts, but it varies by product and lender, so check the specific loan before refinancing. You can also compare line of credit and overdraft options if you're weighing up different credit structures.
