Fixed Rate Home Loan Expiring? Here Is What to Do Before the Revert Rate Kicks In
Most homeowners do not realise their interest rate can jump when their fixed term ends. This guide explains what happens, what the revert rate means, and how to act before repayments increase.
Check Your Numbers Before You Decide
Use these calculators to estimate repayments, compare refinancing savings, and understand your position before your fixed term ends.
Calculators provide general estimates only. For a personalised review, book a free consultation.
A homeowner in Parramatta recently contacted our office after their fixed rate expired. Their repayments had increased by more than $500 per month. They had received a letter from their bank but assumed the loan would continue in a similar way.
This situation is common. When a fixed rate home loan ends in Australia, the loan usually moves automatically to the lender’s standard variable revert rate. That rate may be higher than what the borrower was paying and higher than rates available elsewhere in the market.
Revert rates may be higher than competitive variable rates. On a large home loan, even a small rate difference can add hundreds of dollars to monthly repayments. Acting early gives you more control.
What Happens When Your Fixed Rate Ends
When your fixed term expires, your loan usually moves automatically to the lender’s variable revert rate. You normally do not need to sign new paperwork for this to happen.
At the same time, you may gain access to features that were restricted during the fixed period, such as extra repayments, offset access and product switching without fixed-rate break costs.
Your rate may move to a revert rate, extra repayment flexibility may return, offset access may become available, break fees may no longer apply, and you may be able to refinance or restructure.
What Is the Revert Rate?
The revert rate is the interest rate your lender applies after your fixed rate period ends. It is usually a standard variable rate and may not be the most competitive rate available from your current lender or the broader market.
This is why reviewing the loan before expiry is important. If you do nothing, your repayments may rise automatically. If you review early, you may be able to negotiate with your current lender, move to a better variable product, refix, split the loan or refinance to another lender.
For more background on rate movements, read our guide on the current interest rate environment in Australia.
When to Start Reviewing Your Options
The best time to act is usually 60 to 90 days before the fixed term ends. This provides enough time to compare options, collect documents, negotiate with the current lender and apply for refinance if needed.
60 to 90 Days Before Expiry
Review your current loan, check your expiry date, estimate your property value, calculate your current loan-to-value ratio and avoid unnecessary new credit applications.
30 to 45 Days Before Expiry
Ask your current lender for a retention discount, compare fixed and variable offers, gather payslips and mortgage statements, and speak with a mortgage broker.
0 to 30 Days Before Expiry
Choose whether to stay, refix, split or refinance. If refinancing, submit the application early enough to reduce time spent on the revert rate.
Your 4 Options When Your Fixed Rate Ends
Once your fixed term is ending or has ended, you generally have four options. The right option depends on your budget, risk comfort, savings position, loan features and future plans.
| Option | What It Means | Best For | Watch Out For |
|---|---|---|---|
| Roll to Variable | The loan moves to a variable revert rate. | Borrowers who want flexibility and may make extra repayments. | The revert rate may be above market. Ask for a discount first. |
| Fix Again | You lock in a new fixed rate for a set term. | Borrowers who want repayment certainty. | Break costs may apply if you exit early. Offset access may be limited. |
| Split the Loan | Part fixed and part variable. | Borrowers who want both certainty and flexibility. | You will manage two loan portions with different features. |
| Refinance | You switch to a new lender or loan product. | Borrowers seeking a sharper rate, better features or cashback. | Requires paperwork, valuation and approval by the new lender. |
For a deeper comparison, read our guide on fixed, variable and split rate home loans.
How to Negotiate a Better Rate With Your Current Lender
Many lenders may reduce your rate if you ask before the fixed period ends. Call your lender and request their best retention rate. Tell the lender you are comparing refinance options.
If the lender’s offer is still higher than rates available elsewhere, refinancing may be worth considering. Use the loan repayment calculator to compare the monthly difference.
The Offset Account Opportunity
When a fixed rate ends, some borrowers gain better access to offset accounts. An offset account can reduce the loan balance used to calculate interest.
For example, if your loan is $550,000 and you hold $50,000 in an offset account, interest may be calculated on $500,000 instead of $550,000. This can make a meaningful difference over time.
Read our full comparison here: Offset Account vs Redraw Facility.
When Refinancing May Make Sense
Refinancing may make sense when the interest savings and loan features outweigh the cost of switching. Costs may include discharge fees, registration fees, possible application fees and valuation costs.
Some lenders may also offer cashback incentives for eligible refinancers. A broker can compare whether the total saving makes the switch worthwhile.
Learn more on our refinancing services page.
What Investment Property Owners Should Know
If your expiring fixed rate is attached to an investment loan, review the loan structure carefully. If an interest-only period is also ending, repayments may increase for two reasons at the same time.
Investors should also consider tax and cash flow implications before restructuring. Speak with an accountant for tax advice and your broker for loan structure guidance.
For investment lending support, visit our investment property finance page.
Frequently Asked Questions
What happens when my fixed rate home loan expires?
Your loan usually moves to your lender’s standard variable revert rate. Your repayments may increase and you may regain access to extra repayments, offset accounts and refinancing flexibility.
How long before my fixed rate expires should I act?
Start reviewing your options 60 to 90 days before expiry. This gives you time to compare lenders, negotiate with your lender and refinance if needed.
Can I refinance when my fixed rate ends?
Yes. Once the fixed period ends, break costs generally no longer apply. You can refinance subject to lender approval, valuation and eligibility.
What is a revert rate?
A revert rate is the rate your lender applies after your fixed period ends. It is usually a variable rate and may be higher than competitive market offers.
Should I fix again or go variable?
Fixing again may suit borrowers who want certainty. Variable may suit borrowers who want flexibility and offset access. A split loan can offer a combination of both.
Can I negotiate before the fixed rate expires?
Yes. You can ask your current lender for a retention discount. A broker can compare that offer against other lenders to see whether staying or switching gives a better outcome.
Ready to Discuss Your Fixed Rate Expiry?
Book a free consultation with Kishor Acharya. We will review your current loan, compare options across 50 plus lenders and help you choose a structure that suits your budget.
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General information only. The information on this page is general in nature and does not take into account your personal financial circumstances, objectives or needs. It is not financial advice. Before acting on any information, you should consider whether it is appropriate for your situation and seek independent professional advice. Interest rates, lender policies and government scheme eligibility criteria are subject to change without notice. Approval is subject to the lender’s standard credit assessment and eligibility requirements.
Mero Chino Groups Pty Ltd T/As Laxmi Home Loans | ABN 76 169 013 012 | Credit Representative Number 476974 | Authorised under Australian Credit Licence Number 383640
