Start with your lender's expiry notice
A fixed interest rate applies for a set period, not necessarily the full mortgage term. When that period ends, your loan will generally move to a variable rate under its contract unless you arrange a different option. Ask your lender for the expiry date, the proposed revert rate, any fees and the estimated new repayment. Do not assume the revert rate is the lender's most competitive offer.
Check your repayment budget
Compare repayments using your current balance and remaining loan term. Allow for property costs, insurance, other debts and an emergency buffer. Test a higher-rate scenario as well as the quoted rate: a variable repayment can change again. A lower repayment achieved by extending the term is not the same as a lower overall borrowing cost.
Compare three realistic options
- Stay and negotiate: ask your lender to review its variable rate and fees.
- Fix again or split: compare certainty against restrictions on extra repayments, offset features and early exit.
- Refinance: compare another lender's total costs, features and assessment requirements.
Refinancing is a new credit application. Your income, expenses, debts and the lender's property valuation still matter, even if you have never missed a mortgage repayment. Start discussing your options several weeks before expiry so there is time to gather documents; settlement timing is not guaranteed.
Ask about break costs before moving early
Exiting a fixed loan before its end date, or making repayments above its allowance, may trigger break costs. Ask for a current written quote and its validity period. Compare an early switch with waiting until expiry; do not rely on a generic online estimate. Discharge, application and other switching costs can still apply when the fixed period ends.
Confirm the details after any change
Check the new repayment date, direct debit, loan term and any offset-account link. Keep enough cash available while payment arrangements change. If the projected repayment is unaffordable, speak to your lender early about assistance rather than waiting for a missed payment.
Next reads: refinancing break-even costs and fixed versus variable loans.
Further reading
ASIC Moneysmart: switching home loans.
General information only, not personal financial, tax or legal advice. Rates, fees, eligibility and lender policies vary. Credit is subject to assessment and approval.