Refinancing When Your Fixed Rate Ends – What to Do 3–6 Months Before the Cliff

Refinancing When Your Fixed Rate Ends – What to Do 3–6 Months Before the Cliff

When a fixed-rate home loan ends, your repayments can jump overnight — often by hundreds of dollars a month. The good news? With the right timing and strategy, you can avoid the “rate shock” completely and move onto a better deal.

This guide walks you through exactly what to do in the 3–6 months leading up to your fixed rate expiry.

1️⃣ What Happens When Your Fixed Rate Expires?

When a fixed loan ends, most lenders automatically switch you to their standard variable rate. This rate is usually:

• Much higher than competitive variable rates in the market.
• Rarely discounted for loyalty.
• Not the one you’d choose if you were applying fresh today.

If you do nothing, your repayments will jump — usually by a significant amount.

2️⃣ Your 3–6 Month Countdown Starts Here

The best time to start planning is three to six months before the fixed rate ends.

• Most lenders will give you options early.
• You can compare fixed vs variable vs split options.
• You have time to refinance if needed.

Waiting until the last minute limits your choices — and may cost you.

3️⃣ Step 1: Check What Your Bank Plans to Move You To

Your bank will send a letter outlining:

• Your new default variable rate.
• Any automatic discounts.
• Other options (new fixed rates, split loan options).

These “standard” options are often not the best available. They’re just the defaults the bank wants you to roll onto.

4️⃣ Step 2: Compare Your Bank’s Offer With the Market

This is where the real savings are found. Compare:

• Current variable rates available to new borrowers.
• New fixed rates (short and medium terms).
• Split loans if you want protection + flexibility.
• Cashback deals that may offset switching costs.

Homeowners who compare multiple lenders often find much cheaper deals than what their bank offers.

5️⃣ Step 3: Decide Whether You Want Fixed, Variable or a Split

Each option has different benefits:

• Variable: Flexibility, offset account, lower early repayment restrictions.
• Fixed: Predictable repayments, protection from future rate rises.
• Split loan: A mix of certainty and flexibility.

Your choice depends on your goals, cash flow and risk comfort.

6️⃣ Step 4: Check Your Equity & Borrowing Capacity

A refinance requires a new assessment. Lenders will look at:

• Your property value and equity.
• Your income stability.
• Your spending and bank statements.
• Your repayment history.

The more equity you have, the better your options.

7️⃣ Step 5: Avoid Rolling Straight Onto the High Variable Rate

If you do nothing, you’ll likely move onto your bank’s “back-book” variable rate — often the highest rate they offer.

A few ways to avoid this:

• Negotiate a sharper rate with your lender.
• Ask your lender for retention deals (sometimes good, sometimes not).
• Refinance before the expiry date.

Doing nothing is almost always the most expensive option.

8️⃣ Step 6: Time Your Refinance to Avoid Break Fees

If you refinance before the fixed rate ends, your current lender may charge break costs.
If you refinance after it ends, break costs are usually $0.

The key is timing:

• Submit your refinance 3–6 weeks before expiry.
• Time settlement for the week the fixed rate finishes.

A broker can coordinate the dates so you avoid unnecessary charges.

9️⃣ Step 7: Calculate Your New Repayments Early

Don’t wait until the switch happens. Forecast your new repayments:

• Your bank will often give you an estimate.
• A broker can calculate exact figures based on current rates.
• You can adjust your budget early to avoid a sudden shock.

Knowledge removes anxiety.

🔟 The Smartest Way to Prepare for Your Fixed Rate Ending

A broker can help you:

• Compare your bank’s offer with better market deals.
• Time the refinance to avoid break fees.
• Choose the best structure (variable, fixed or split).
• Forecast your repayments before anything changes.