A few weeks ago, a client called us the way most people do when their fixed rate is coming up for renewal: a little uncertain, a little worried, and not entirely sure what happens next. It is one of the most common conversations we have at PierPoint Lending. A large number of Australians locked in a fixed rate over the past two to three years, and a great many of those terms are ending in the months ahead. If yours is one of them, the good news is that you have more control over what happens next than you might think, provided you start looking early.
Roughly 38 per cent of Australian mortgages are due to move off a fixed rate within the next 12 months. When a fixed term ends, most lenders automatically roll the loan onto their standard variable rate, which is often noticeably higher than the fixed rate you have been paying, and higher again than the sharpest rates currently available in the market.
Borrowers who do nothing can see their repayments rise by the equivalent of 1.5 to 2.5 percentage points overnight. The RBA cash rate currently sits at 4.35 per cent. Refinancing before or shortly after your fixed term ends, rather than defaulting onto the revert rate, is generally the difference between a manageable transition and an unwelcome shock. Many lenders are also currently offering cashback incentives of $1,000 to $5,000 for eligible refinancers, though these should never be the main reason for choosing a loan.
Why So Many Fixed Rates Are Ending at Once
Fixed rate popularity surged during 2023 and 2024, when a large share of borrowers locked in two, three or four year terms to gain certainty during a period of rapid rate rises. Those terms are now reaching maturity in a wave, which is why so many Australians are dealing with this question at the same time. Lenders are well aware of the scale of this shift and have started pre-approving borrowers for a new loan up to 90 days before their fixed term ends, precisely so they can capture the refinance before the borrower rolls onto a revert rate.
What Actually Happens When Your Fixed Term Ends
If you do not take any action, your loan does not simply stop. Instead, your lender will automatically move you onto its standard variable rate, sometimes called the revert rate. This rate is rarely competitive. Lenders price their sharpest offers to attract new customers, and standard variable rates for existing borrowers who have not actively renegotiated tend to sit well above what is available elsewhere in the market. This is the same dynamic behind what is sometimes called the mortgage loyalty tax, where borrowers who stay put without reviewing their loan end up subsidising the discounts offered to new customers.
How Much More You Could End Up Paying
The gap between a fixed rate and a lender’s revert rate typically works out to somewhere between 1.5 and 2.5 percentage points. On a $600,000 loan, that difference can add several hundred dollars to your monthly repayment, arriving all at once rather than gradually. For a household budget built around the certainty of a fixed repayment, that kind of jump can be a real shock, which is why planning ahead matters so much here.
Why Reviewing Your Options Early Works in Your Favour
The borrowers who come out of this transition best are the ones who start looking at their options well before their fixed term ends, ideally two to three months out. This gives enough time to compare what your current lender is prepared to offer against what else is available in the market, understand how your borrowing position has changed since you last applied, and, if refinancing makes sense, have a new loan ready to settle close to the date your fixed term expires. Acting early also means you are negotiating from a position of choice rather than urgency, which tends to produce a better outcome.
A Word on Cashback Offers
A number of lenders are currently offering cashback incentives to borrowers who refinance, generally somewhere between $1,000 and $5,000 depending on the loan size and lender. These can be a useful sweetener, particularly if you are planning renovations or simply want to offset the cost of switching. That said, a cashback offer attached to an uncompetitive interest rate or a loan with limited flexibility can end up costing you more over time than it saves. It is worth weighing any cashback against the interest rate, fees, loan features and any clawback conditions before it influences your decision.
If your fixed rate is due to end in the next few months, the most useful thing you can do is start the conversation early. At PierPoint Lending, we compare your current lender’s offer against hundreds of products across the market, handle the paperwork, and aim to have everything in place well before your fixed term runs out, so you never have to sit on an uncompetitive revert rate while you figure out what to do next. Get in touch and we will walk through your options together
Frequently Asked Questions
How early should I start looking at my options before my fixed rate ends?
Ideally two to three months before your fixed term expires. This gives enough time to compare your current lender’s offer against the wider market, get your paperwork in order, and settle a new loan close to your expiry date so you avoid spending any real time on the revert rate.
What happens if I do nothing when my fixed rate expires?
Your lender will automatically move your loan onto its standard variable rate. This rate is usually higher than both your previous fixed rate and the more competitive rates available elsewhere, which can mean a noticeable and immediate increase in your repayments.
Will the APRA serviceability buffer make it harder to refinance?
APRA’s 3 per cent serviceability buffer applies to new loan assessments generally, but many refinances, particularly where the loan amount is not increasing and the new repayments are lower than the current ones, can be assessed more straightforwardly. A broker can confirm how your specific situation is likely to be assessed.
Are cashback offers worth chasing when I refinance?
They can be a helpful bonus, but they should never be the deciding factor. Always weigh a cashback offer against the ongoing interest rate, fees and features of the loan, and check whether any clawback conditions apply if you refinance again within a set period.
Can I just fix my rate again when my current term ends?
Yes, refixing is an option with most lenders, and it may suit you if you value certainty over your repayments. Whether it is the right move depends on where rates are tracking at the time and your own plans, so it is worth comparing a new fixed term against variable and split loan options before deciding.
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