If your fixed-rate home loan is approaching the end of its term, your interest rate will usually
revert to the standard variable rate. This may result in changes to your repayments. Here are
some options to consider:
- Refinance to a variable rate loan
If you are comfortable with a variable interest rate, refinancing to a variable loan may provide
more flexibility, such as the potential to make additional repayments or redraw funds.
Variable rates can change over time, so repayments may increase or decrease depending
on market conditions. - Move to an agreed variable rate with your current lender
You may choose to allow your fixed-rate loan to revert to the lender’s standard variable rate.
Keep in mind that repayments and interest charges may change as a result. - Split your loan between fixed and variable rates
A split loan allows part of your balance to remain fixed while the other part is variable. Fixed
portions provide certainty over repayments, while variable portions may allow flexibility such
as extra repayments or redraw. This approach may help you manage interest rate
fluctuations, depending on your loan terms. - Re-fix your home loan
You can refinance to a new fixed-rate loan to lock in a new interest rate for a set period.
Refinancing may involve fees, such as exit or application fees, and whether this is beneficial
depends on your circumstances. - Negotiate with your lender
You can discuss a new fixed or variable rate with your current lender. Some lenders may
offer alternative rates to retain existing customers, particularly if you have a good repayment
history. Outcomes are not guaranteed and depend on the lender’s assessment.
Before making a decision, consider your financial situation, goals, and plans for your
property. For example, if you plan to sell soon, refinancing may not be necessary, whereas if
you intend to hold the property long-term, a new fixed-rate loan could provide more certainty.
This information is general in nature and does not constitute personal advice. You should
seek tailored guidance from a mortgage broker or financial adviser to explore options
suitable for your individual circumstances.