A homeowner in Parramatta recently called our office in a panic. Her fixed rate had just expired the week before. Without realising it, her repayments had jumped by over $500 a month. She had received a letter from her bank but set it aside, assuming things would stay the same.

This situation is far more common than most people expect. When a fixed rate home loan ends in Australia, your loan does not simply continue at a competitive rate. It rolls onto your lender’s standard variable rate, commonly called the revert rate, and that rate is almost always significantly higher than what you were paying.

This guide explains what happens when your fixed term ends, what the revert rate means for your repayments, and the four paths you can take to protect your budget and reduce what you pay in interest.

What Happens When Your Fixed Rate Ends

When your fixed term expires, three things happen at the same time, and most borrowers are not prepared for all three.

Your loan moves automatically to your lender’s revert rate. There is no paperwork required and no warning beyond a letter that most people overlook. You do not need to sign anything for the change to take effect. The higher rate simply applies from the day after your fixed term ends.

At the same time, you gain access to features you did not have during the fixed period. You can now make unlimited extra repayments, link an offset account, and switch products or lenders without paying break fees. These freedoms are valuable, but most people focus on the rate increase rather than the flexibility they have just gained.

The third thing that happens is that your comparison window opens. Without break fees, you are free to shop every lender on the market. This is the moment when switching becomes genuinely cost-effective.

What Is the Revert Rate and Why Does It Matter

The revert rate is the default interest rate your lender charges once your fixed term has expired. Banks set these rates at levels that are profitable for them, not competitive for you. They rely on the fact that most borrowers either do not notice the change or find the switching process too complicated to act on quickly.

Revert rates are not the same as the standard variable rates advertised to new borrowers. They are typically higher. A lender advertising a variable rate of 6.20 percent to new customers may have a revert rate of 7.10 percent or more for existing fixed-rate customers rolling off their term.

This gap between what new customers pay and what existing customers automatically fall onto is sometimes called the loyalty tax. It is one of the most common reasons Australians overpay on their mortgage for years without realising it.

If you are interested in how lenders and regulators are approaching this issue, the current interest rate environment in Australia affects what rates are available to you right now when you compare products.

The Right Timing: When to Start Reviewing Your Options

The single biggest mistake borrowers make is waiting until their fixed rate has already expired before taking action. By that point, you have already started paying the higher revert rate, and refinancing typically takes four to six weeks to complete.

Starting 60 to 90 days before expiry gives you the best outcome. Here is a practical timeline to follow.

Your 4 Options When Your Fixed Rate Ends

Once your fixed term has expired, you have four clear paths. Each suits a different financial situation and set of goals. Understanding which one fits your circumstances is the most important decision you will make at this point in your loan.

For guidance on how fixed, variable, and split rate structures compare across the life of a loan, read our detailed guide to fixed, variable, and split rate home loans.

How to Negotiate a Better Rate With Your Existing Lender

Many borrowers do not realise that lenders will often reduce your rate if you simply ask. Retention discounts are standard practice in Australia. Banks do not want to lose established customers, and they know that mortgage brokers and comparison tools have made switching easier than ever.

When you call your lender, be specific. Tell them your fixed rate is expiring and you are reviewing all your options. Ask what their best retention rate is. Have a number in mind based on what you have seen in the market. If their offer is not competitive, tell them you are ready to refinance.

Some lenders will match or beat the market rate to keep your business. Others will not. If the best they can offer is still well above what other lenders are advertising, refinancing is almost always the better financial decision.

To understand how your current repayments compare under different rate scenarios, the Laxmi Home Loans repayment calculator gives you a side-by-side comparison in minutes.

The Offset Account Opportunity After Your Fixed Rate Ends

One of the most valuable features you gain when your fixed rate expires is access to a full offset account. During a fixed period, most lenders either do not allow an offset account at all or cap the offset benefit at a small amount.

An offset account is a transaction account linked directly to your home loan. Every dollar sitting in that account reduces the loan balance on which interest is calculated. If your loan is $550,000 and you hold $50,000 in your offset account, you only pay interest on $500,000.

For borrowers with surplus savings, this can save tens of thousands of dollars over the life of a loan. Understanding the difference between an offset account and a redraw facility matters here because they work in different ways and suit different financial habits. Read our full comparison at laxmihomeloans.com.au/offset-account-vs-redraw-facility/.

When to Consider Refinancing Instead of Staying

Refinancing makes strong financial sense when the rate saving over two to three years exceeds the cost of switching. The main costs to factor in are the discharge fee from your existing lender (typically $150 to $350), the registration fee for the new mortgage, and any application or valuation fees charged by the new lender.

In most cases, these costs total between $500 and $1,500. If the new rate saves you $150 or more per month, you recover those costs within 12 months and save money every month after that.

Cashback offers from lenders can also offset switching costs entirely. Some lenders offer $2,000 to $4,000 cashback to refinancing borrowers, which effectively eliminates the upfront cost of switching.

If you are concerned about rates rising in the near term, this article on the current rate environment and what borrowers should watch provides useful context before you decide.

What Investment Property Owners Should Know

If the loan expiring is on an investment property, the strategy at this point may differ from an owner-occupied loan. Investment property loans are often structured with interest-only repayments for a set period. If your IO period is also expiring alongside your fixed rate, your repayments could increase for two separate reasons simultaneously.

Investors should also consider the tax implications of their loan structure. Interest on investment loans is generally deductible, and the choice between fixed and variable rates can affect deductibility timing. Speak to your accountant before restructuring an investment loan. You can explore investment loan structures further at our investment property finance page.

If you are also considering how proposed changes to negative gearing and capital gains tax may affect your investment strategy, our guide to negative gearing and CGT changes outlines what has been proposed and what it could mean for property investors.

Frequently Asked Questions

Related Reading From Laxmi Home Loans

• Fixed, Variable, and Split Rate Home Loans Explained
• Offset Account vs Redraw Facility: Which Is Right for You
• Refinancing Your Home Loan: How Laxmi Home Loans Can Help
• Current Interest Rate Environment: What Borrowers Should Know in 2026
• Negative Gearing and CGT Changes: What Property Investors Need to Know