Coming Off a Fixed Rate? Key Steps to Take Before Your Loan Changes
Key Takeaways
Doing nothing means the loan rolls onto the lender's revert rate, which is often higher than you need to pay, so start reviewing two to three months before expiry.
Estimate the gap between your current fixed repayment and the revert repayment early, so any increase is planned for rather than a surprise.
Weigh the four options against your priorities: re-fix for certainty, variable for flexibility and offset, split for both, or refinance for a better rate or structure.
Watch the costs: break costs apply mid-term but not at natural expiry, refinancing needs a fresh serviceability check, and matching the remaining term avoids adding lifetime interest.
If your fixed rate is about to end, the timing matters more than usual. Many borrowers locked in a fixed rate when rates were lower, and with the Reserve Bank of Australia (RBA) cash rate now at 4.35% after a run of increases through the first half of 2026 and variable rates in the high 6% range, coming off a fixed rate today often means a noticeable jump in repayments. The change can feel sudden, but it is entirely predictable, and the borrowers who handle it best are the ones who prepare before the loan rolls over rather than after.
The key thing to understand is that doing nothing is itself a decision. When a fixed period ends, the loan usually rolls automatically onto the lender's revert rate, which is often higher than what you could secure by acting. That makes the weeks before your expiry date a genuine opportunity to review your options, avoid an unnecessary jump in repayments, and reshape the loan around where your life is now rather than where it was when you fixed.
This article explains what happens when your fixed rate ends, how to estimate your new repayments, the four main options, and how to choose the one that suits your situation.
What happens when your fixed rate ends
When your fixed period expires, the certainty of a set repayment ends with it, and the loan moves to a new footing. Knowing the default outcome helps you see why preparation matters.
Unless you arrange otherwise, the loan rolls onto the lender's standard variable revert rate, which is frequently higher than the competitive rates available in the market. Lenders usually notify you before expiry, commonly six to eight weeks ahead, which is your prompt to act. At that point, you have real choices, from re-fixing to moving to variable, splitting the loan or refinancing, and the right one depends on your goals, your budget and the features you need.
Why acting early matters
The single most useful habit is to start reviewing before your fixed rate ends, not on the day it does. Time gives you options, while leaving it late takes them away.
Re-pricing with your lender, or refinancing to another, can take time to arrange, and if you leave it until after expiry, you may spend weeks on an uncompetitive revert rate while the process catches up. Starting your review around two to three months before expiry gives you room to compare the market, prepare any refinance application and have a new arrangement ready to take effect as the fixed period ends. Acting early also gives you leverage, since a lender is more likely to offer a competitive rate when you have time to walk away.
Step one: Know your expiry date and current position
Before you can compare options, you need a clear picture of where your loan stands. This baseline is what every decision is measured against.
Check the date your fixed rate ends, your current loan balance, and the repayment you have been making. Find out the revert rate your loan would roll onto if you did nothing, since that is your default. It also helps to know your property's current value and your equity, because together they determine your loan-to-value ratio (LVR), which affects both your refinancing options and whether you would face Lenders Mortgage Insurance. With these figures in hand, you can compare your choices on real numbers rather than guesswork.
Step two: Estimate your new repayments and the shock
The most important number to work out is how much your repayment will change, because that is what you are managing for. Comparing three figures gives you the full picture.
Look at your current fixed repayment, the repayment at the revert rate you would roll onto, and the repayment at the competitive rates available if you re-fix or refinance. The gap between the first and second is your potential repayment shock. As an illustration, a $500,000 loan coming off a fixed rate of around 5.5% onto a revert rate near 6.8% could see repayments rise by roughly $420 a month. Your actual change depends on your balance, your rates and your remaining term, but modelling it in advance means the increase is something you have planned for rather than something that arrives as a surprise.
Step three: Compare your options
Once you know your numbers, the decision comes down to four main paths. Each suits a different priority, so it helps to weigh them against what matters most to you now.
Re-fixing your loan
Re-fixing locks in a new fixed rate for another set period, giving you certainty over your repayments. It suits borrowers who value knowing exactly what they will pay and who are offered a competitive rate. The trade-offs are less flexibility, often limited extra repayments and offset features, and break costs if you need to exit the fixed term early before it expires.
Moving to variable
Moving to a variable rate gives you flexibility and full access to features such as an offset account, redraw and unlimited extra repayments. The trade-off is that your repayments move with the market, so they can rise or fall. It suits borrowers who value flexibility and the ability to pay down the loan faster, and who can comfortably absorb movement in their repayments.
Splitting the loan
A split loan divides your borrowing into a fixed portion and a variable portion, giving you certainty on part of the loan and flexibility on the rest. It is a practical middle path for borrowers who want some protection against rate rises while still keeping an offset and extra repayments on the variable portion. You choose the proportion that balances your need for certainty against your need for flexibility.
Refinancing to another lender
If your current lender's revert rate or re-fix offer is not competitive, or the loan structure no longer fits your needs, refinancing to another lender can secure a better rate, better features, or both. It does require a fresh application and carries some costs, but for many borrowers, the end of a fixed period is the natural moment to move. The next sections cover what refinancing involves.
Don't overlook your feature needs
Coming off a fixed rate is not only about the rate; it is a chance to reshape the loan around how you manage money now. Your needs may have changed since you first fixed.
This is a good moment to consider whether you want an offset account, redraw, the ability to make extra repayments, a split structure, or to consolidate other debt into the loan. It is also a chance to align the remaining term with your goals. A borrower who fixed a few years ago may now have a higher income, different savings habits or a clearer plan to pay the loan down faster, and the features that suited them then may not be the ones that suit them now. Matching the loan to your current situation can be as valuable as the rate itself.
Refinance readiness: what changes when you apply
Refinancing is not automatic; it means being assessed again as if applying for a new loan. Understanding this in advance helps you avoid an unwelcome surprise.
When you refinance, the new lender reassesses your income, expenses, credit history and your property's current value, and tests your repayments at your actual rate plus a buffer of 3 percentage points set by the Australian Prudential Regulation Authority (APRA), so the loan is assessed at around 9.5%. Some borrowers find their circumstances have shifted since they last applied: a drop in income, higher rates reducing borrowing capacity, or a lower property value lifting their LVR can all make refinancing harder, and in some cases, a borrower may struggle to move lenders at all. If that applies to you, negotiating a better rate with your current lender, sometimes called a retention rate, can be a strong alternative, since staying put does not require a full reassessment.
Watch for fees, break costs and the loan-term reset
A few costs and traps can erode the benefit of switching if you are not aware of them. Knowing where they sit helps you make a clean comparison.
Break costs apply when you exit a fixed loan during the fixed term, not when it expires naturally, so timing a change to your expiry date generally avoids them; refinancing before your fixed period ends, by contrast, can trigger a break cost. Refinancing to a new lender also usually involves a discharge fee from your current lender and application or valuation fees from the new one, which should be weighed against the savings. There is also the loan-term reset to watch: refinancing often resets the loan to a fresh 30-year term, which lowers your repayment but can add to your lifetime interest if you were several years in. Matching the new loan to your remaining term avoids this. Finally, an attractive cashback offer should be weighed over the full term rather than treated as a reason on its own to switch.
Common mistakes to avoid
Most of the costly errors at fixed-rate expiry are avoidable with a little awareness. Keeping these in mind helps you make the most of the moment.
Doing nothing and letting the loan roll onto a high revert rate by default.
Re-fixing the whole loan when you actually need flexibility or offset features.
Resetting the loan to a fresh 30-year term without checking the effect on lifetime interest.
Refinancing mainly for a cashback offer rather than the ongoing cost.
Leaving the review too late, which can strand you on the revert rate while you sort out a change.
Each of these comes down to treating the expiry as a decision to make deliberately, rather than a deadline to let pass.
Real borrower scenarios
The choices become clearer when applied to real situations. The following examples show how borrowers tend to handle a fixed rate ending.
A borrower rolling off a low fixed rate faces a jump to the revert rate, reviews the market two months before expiry, and uses competing offers to negotiate a better rate with their current lender, avoiding most of the increase.
A borrower who wants to pay their loan down faster moves to a variable rate when their fixed period ends, gaining an offset account and the ability to make extra repayments that the fixed loan did not allow.
A borrower whose income has dropped since they fixed finds refinancing difficult because their borrowing capacity has fallen, so they negotiate a retention rate with their existing lender rather than moving.
A borrower who wants some certainty without giving up flexibility splits the loan, fixing part for protection against further rate rises while keeping the rest variable with an offset.
How a mortgage broker compares your options
Choosing between re-fixing, variable, a split, and refinancing means weighing rates, features, fees, your equity, and your serviceability all at once, often under the time pressure of an approaching expiry. This is where a broker adds practical value beyond finding a rate.
A broker can model your repayments across the options, compare your current lender's offer against the market, check whether refinancing stacks up once fees and the term are counted, and flag early if your circumstances might make refinancing harder. If your fixed rate is ending, speaking with a mortgage broker in Albury & Wodonga can help you review your current loan, compare re-fixing, variable, split and refinance options, and arrange the right next step before your loan rolls over.
Frequently Asked Questions (FAQs)
What happens when my fixed rate ends?
When your fixed period expires, the loan usually rolls automatically onto your lender's standard variable revert rate unless you arrange something different. That revert rate is often higher than competitive market rates, so your repayments can rise. Lenders typically notify you before expiry, which is your prompt to review your options rather than letting the loan roll over by default.
Will my repayments automatically increase?
They often do, particularly if you fixed when rates were lower than they are now. The loan moves to the revert rate, which is frequently higher than what you could secure by re-fixing or refinancing. Estimating the difference between your current repayment and the revert repayment before expiry lets you plan for the change and decide whether to act.
Should I choose fixed or variable after my fixed term ends?
It depends on what you value. Re-fixing gives certainty over your repayments, while variable offers flexibility and features such as an offset account and extra repayments, with repayments that move with the market. A split loan lets you have both, fixing part and leaving part variable. The right choice comes down to your need for certainty versus flexibility and your capacity to handle rate movement.
How early should I review my fixed-rate expiry?
Around two to three months before your fixed rate ends is a sensible time to start. Re-pricing or refinancing can take time to arrange, and beginning early means you can have a new arrangement ready as the fixed period expires, rather than spending weeks on the revert rate while you organise a change. Acting early also gives you more negotiating leverage.
Are there break costs if I leave my fixed loan?
Break costs generally apply only if you exit a fixed loan during the fixed term, not when it expires naturally. Timing a change to coincide with your expiry date usually avoids them. If you refinance or switch before your fixed period ends, however, a break cost can apply, so it is worth checking the figure before making a change mid-term.
Will I need to pass serviceability again to refinance?
Yes. Refinancing to a new lender means a fresh assessment of your income, expenses, credit history and property value, with repayments tested at the buffered rate. If your circumstances have changed since you last applied, this can affect whether you qualify. Where refinancing is difficult, negotiating a better rate with your current lender is often a strong alternative, since it does not require a full reassessment.
Should I reset my loan term when refinancing?
Not without considering the cost. Refinancing often resets the loan to a fresh 30-year term, which lowers your repayment but can increase your total interest if you were several years into your previous loan. Matching the new loan to your remaining term lets you capture a better rate without extending your debt. It is a choice worth making deliberately rather than accepting the default.
The Bottom Line
Coming off a fixed rate is a predictable moment that rewards preparation. Left alone, the loan rolls onto a revert rate that is often higher than you need to pay, so the weeks before expiry are your chance to compare re-fixing, moving to variable, splitting the loan or refinancing, and to reshape the loan around your life as it is now. Estimate your new repayment early so any increase is planned for, weigh the fees and the term reset before you switch, and remember that if refinancing is difficult, negotiating with your current lender can still secure a better deal. Start the review two to three months ahead, choose deliberately, and you can turn a fixed-rate expiry from a source of repayment shock into an opportunity to improve your loan.