What happens when your home loan's fixed rate term ends?
When your fixed rate term expires, your home loan typically gets automatically switched over to a variable rate with the same lender, unless you choose to refinance. That usually means a change to your interest rate and regular repayments, and potentially different fees and features too.
With home loan rates in Australia increasing significantly in 2026, many borrowers rolling off a fixed rate are facing higher repayments on the other side.
Our analysis of more than 4,000 refinance enquiries received by Money.com.au between April and September 2026 shows that borrowers on an existing fixed rate were paying, on average, 33 basis points less on their current loan compared with refinancers on a variable rate. For many fixed rate borrowers, that’s a gap they’ll feel in their repayments once their fixed term ends.
But there are ways to limit, or at least manage, the impact on your repayments. We asked Money.com.au’s expert mortgage brokers to explain the main options borrowers have when their fixed rate term ends.
1. Stay with your current lender on a variable rate
2. Refinance to a better variable rate with another lender
4. Refinance the loan into a split variable and fixed interest rate loan
Option 1: Stay with your current lender on a variable rate
When your fixed term comes to an end, it will automatically roll over to your lender’s revert variable rate. In some cases, it may simply be best to let this happen rather than refinancing. If the interest rate you’re rolling onto is competitive, staying put will mean you’ll avoid refinancing costs.
The lender will send a notification, typically between 30 or 90 days before the fixed rate expires. This will show the revert rate and provide an estimate of your new monthly repayments.
If you are happy with that rate and do nothing, your loan simply switches over to the variable rate typically without any paperwork necessary.
Case study: When reverting to a variable rate with the existing lender made financial sense
Nick Burgess, Money.com.au Senior Mortgage Broker
“A client reached out to us when their $700k fixed rate home loan was about to expire. The customer had a low LVR, and the rate they were able to negotiate with their current lender was pretty sharp. Once switching costs were factored in, it was clear they were unlikely to get a better deal elsewhere, and fixing again didn’t make sense for their situation.”
Nick Burgess, Money.com.au Senior Mortgage Broker
Option 2: Refinance to a better variable rate with another lender
The variable rate your fixed loan rolls onto automatically won’t necessarily be competitive versus what’s available elsewhere. In fact, fixed home loan customers often get dumped onto what’s known as the ‘standard variable rate’ offered by the lender. In our experience, these standard rates are indeed pretty ordinary.
You may be able to switch over to a better variable rate offered by your lender, but before you do that, it’s worth looking at what else is available. Given there are dozens of home loan providers in Australia, the chances of your existing lender having the best variable rates are not great, although it is possible. Either way, checking what’s available elsewhere is well worth it.
Case study: How a cashback offer on a low rate home loan helped cover refinancing costs
Nick Burgess, Money.com.au Senior Mortgage Broker
“A client with an expiring fixed rate from Westpac came to us looking for refinancing options to lower repayments and explore possible cashback opportunities.
We discussed a few options including re-fixing with Westpac, but the lack of a cashback incentive meant the customer was keen to look elsewhere. After comparing a range of other lenders, we were able to secure a refinance with ME Bank on a fee-free basic variable rate loan with $3,000 cashback offer, comfortably covering the $850 in discharge and title registration fees involved as part of the switch.”
Nick Burgess, Money.com.au Senior Mortgage Broker
Option 3: Re-fix for another term
If you want to maintain the certainty of having a fixed rate, you can consider re-fixing your home loan for another term. This could mean re-fixing with your current lender if its rates are competitive, or you could refinance elsewhere if there are better rates on offer from other lenders.
If you decide to stay with your current lender, you can’t simply extend your current fixed rate loan. You'll need to choose a new term based on the interest rates available at that time on your lender’s fixed rate loan. With more of your loan paid down, your LVR may have come down since you last fixed, which would mean qualifying for rates in a different LVR band.
Case study: Refixing a loan before rates hike again
Yang Qiu, Money.com.au Senior Mortgage Broker
“We recently helped a client whose 4.89% fixed interest rate with Westpac was coming to an end. Their main priority was maintaining certainty in their repayments, so they wanted to explore options to lock in another rate for a three- or five-year term before rates went up again.
After reviewing options from other lenders, we found that Macquarie’s current fixed rate loan at that time offered significantly lower rates than a similar product from Westpac. We also suggested a split solution, meaning the borrower could make use of the offset account that’s attached to the variable rate loan, while maintaining repayment certainty on the fixed portion.”
Yang Qiu, Money.com.au Senior Mortgage Broker
Option 4: Refinance the loan into a split variable and fixed interest rate loan
A split loan allows borrowers to have both a fixed and variable interest rate on their loan. You can generally choose how much of the loan sits on each rate, e.g. 50/50 or 40/60, based on your own preferences.
The advantage is that it lets borrowers enjoy a balance of the benefits of both rate types. It also offers a gradual transition from fixed to variable when your existing fixed term ends.
That said, our data shows that split home loans are rare, with only 1.4% of refinancers having one, compared with 90.4% on a fully variable rate and 8.2% on a fully fixed rate.
Case study: How a split option helped a client optimise their loan
Yang Qiu, Money.com.au Senior Mortgage Broker
“A client approached us for help refinancing their CommBank home loan as the fixed term was about to expire. They were interested in extending their loan term to 30 years and overall making their repayments more affordable.
We discussed some options and found that the best solution for their circumstances was to split their $620,000 into two portions, with over half going into the variable rate portion and the rest on a fixed rate. We also worked with the client on a strategy allowing them to use a recent redundancy payment to pay off a considerable amount of the variable rate portion of the loan, which wouldn’t have been possible on a purely fixed loan.”
Yang Qiu, Money.com.au Senior Mortgage Broker
What to consider when choosing the best option at the end of your fixed term
- Is the revert rate on the variable loan competitive? Compare it with the variable rates your lender and others offer new customers. If there’s a gap, ask your lender for a better rate before switching.
- What are the current fixed rates available from your current lender and elsewhere? If certainty matters most, compare fixed rates across the market. Remember that most fixed loans limit extra repayments and offset access.
- Do the switching costs reduce the possible benefits of refinancing externally? Work out how long the lower repayments would take to cover the fees. A cashback offer can shorten that considerably.
- Are you happy with your current lender overall? Features like an offset account, redraw and good service matter too. If your lender has been hard to deal with, now is a natural time to move.
- Are there other benefits to switching, like cashback or securing additional funds? Refinancing can let you access equity or consolidate debts. A new lender will reassess your finances, though, so any changes since you last applied could affect what you can borrow.
If you’re unsure how to answer these questions, a mortgage broker can help you weigh up your options.
How to prepare yourself for higher repayments after your fixed rate ends
Put money aside
Use a home loan repayment calculator to estimate the difference between your current fixed loan repayments and your projected payments. Each month, transfer the difference into a savings account that can be used to pay future repayments and act as a cash buffer. This could also help to test whether your household budget can absorb the change comfortably.
Increase your repayments now
If your lender allows you to pay off extra on your loan, try gradually increasing your repayments on your existing fixed rate to the projected amount. This could help make the transition to the revert rate less abrupt, while still helping to pay down the loan. Check your loan terms first, as many fixed rate loans cap how much extra you can repay each year.
Speak to your lender
Contact your lender before your fixed rate period ends to discuss options. It’s possible that the lender may be able to offer a more competitive revert rate or suggest internal refinancing options.
Check the household budget
If there’s going to be a significant jump in repayments you may want to see ahead of time if there’s any way to cut back on household spending, such as by getting rid of unused subscription services or cutting back on other discretionary spending. If there’s a chance that you won’t be able to afford the new repayments, it’s worthwhile contacting your bank’s financial hardship team sooner rather than later.
How much does refinancing after a fixed term cost?
The cost of refinancing when your fixed rate ends will depend largely on the fees your current lender charges when you leave and the upfront fees your new lender charges.
It’s important to check the exact refinancing costs with both lenders, but the main home loan fees to consider include:
- Discharge fee: charged by your current lender when you refinance to a different lender, typically between $100 and $300 per loan.
- Government mortgage registration and discharge fees: state or territory fees to remove your old lender’s mortgage from the property title and register the new one. These vary by state, generally around $100 to $250 per transaction.
- Application fee: a one-off cost to set up the new loan, typically between $150 and $750. Many lenders waive this for refinancers.
- Document processing or settlement fee: a fee for preparing documents and settling the loan, generally between $100 and $600.
- Valuation fee: charged to value your property, typically between $100 and $300. Many lenders cover this for refinancers.
- Break costs: these only apply if you refinance before your fixed term ends, and they can be substantial (see below).
Fixed rate break costs can be substantial
One fee type you certainly want to avoid if at all possible is break costs that apply for ending your fixed rate term early. These can be substantial and are designed to offset the lender’s lost interest that you otherwise would have paid on the loan had you stayed until the end of the term. As an example, ING warns fixed rate break fees “can be substantial, sometimes tens of thousands of dollars.”
Break costs are generally calculated based on how wholesale rates have moved since you fixed. If rates have risen over that time, break costs may be small or even nil, so it’s worth asking your lender for a quote before ruling out refinancing early.
How long before my fixed rate ends should I refinance?
It’s usually a good idea to start weighing your options a couple of months before your fixed term is due to end, rather than waiting until the fixed rate term has finished.
That’s because, depending on the lender and your situation, the whole process of refinancing to a new lender can take up to eight weeks, or longer in extreme cases.
Ideally you want to time the refinance to align as closely as possible with the end date on the fixed term, to avoid unnecessary fees or multiple changes to your repayments in a short space of time.
