Key points
- A loan that reaches the end of its fixed term rolls onto the lender’s variable revert rate automatically.
- Revert rates are typically higher than the variable rate the same lender advertises to new customers.
- Break costs apply during a fixed term, not after it ends.
- Three months before expiry is the point to start comparing.
The end of a fixed term is one of the few moments in a mortgage where doing nothing has a direct, immediate price. The loan doesn’t pause or ask you what you’d like. It rolls onto the lender’s revert rate, and that rate is set for the convenience of the lender rather than the borrower.
Anyone who fixed during the lower-rate window in 2025 is rolling off into a different environment. The cash rate climbed through 2026 and sat at 4.35% after the June decision, so the repayment on the other side of a fixed term is frequently higher than the one before it. Our RBA rate tracker has the current position.
What the revert rate really is
Lenders quote two different variable rates. There’s the one they advertise to win new business, and there’s the revert rate that existing borrowers land on when a fixed term ends. They aren’t the same number, and the gap between them is where lenders make their margin on customer inertia.
Nobody sends you a letter explaining this. You’ll get a notice that your fixed term is ending, usually with an option to refix at whatever the lender is offering that week. Whether that offer is competitive is a question the letter won’t answer.
Your four options
Refix with your current lender. Simplest, and worth doing if the offered rate holds up against the market. Ask for the rate they’d give a new customer, not the one in the letter.
Move to variable with your current lender. Suits borrowers who want offset access or the flexibility to make extra repayments without a cap. Ask to be moved to their new-customer variable rate rather than the revert rate. Lenders will often do this if asked and won’t if you don’t.
Refinance to a different lender. Usually where the biggest saving sits, particularly if your equity position has improved since you first borrowed. It takes a few weeks, so start early.
Split the loan. Part fixed, part variable. It hedges the direction of rates rather than betting on it, and it suits borrowers who want some certainty in the repayment without locking the whole balance.
The timeline that works
| When | What to do |
|---|---|
| 3 months out | Check your rate, equity and current offers across the market |
| 2 months out | Decide: refix, revert to variable, refinance or split |
| 6 weeks out | Lodge the application if refinancing |
| Expiry | New rate or new loan takes effect, no revert period |
Starting at expiry rather than before it means several weeks on the revert rate while an application is processed. On a $700,000 loan, a gap of even one percentage point costs roughly $580 a month. Two months of that is a holiday you didn’t take.
The mistake that costs the most
It isn’t picking the wrong option. It’s assuming the refix offer in the lender’s letter is the market.
That letter reflects one lender’s appetite for your business on the day it was generated. It doesn’t account for the equity you’ve built, an income that’s changed, or the fact that a competitor is currently buying market share in your exact borrower profile. Borrowers who accept the letter rate typically never find out what else was available.
The second mistake is smaller but common: refixing for a long term purely to escape a rate rise. A five-year fixed term locks your repayment and it locks you out of refinancing without break costs for five years. Five years is a long time to be locked out of a better offer.
Where a broker helps here
Two places, mainly.
The first is knowing which lenders are actively competing for refinances right now. That shifts month to month and isn’t published anywhere useful.
The second is structure. If you’re likely to convert the property to an investment, or you’re considering debt recycling, the way the new loan is set up determines whether the interest becomes deductible later. Getting that wrong at refinance is one of the more expensive errors to unwind, because the deductibility of interest follows the purpose the borrowed money was put to, not the security behind it.
If your fixed term ends in the next six months, a review now costs nothing and gives you a number to compare the lender’s letter against. AGS brokers work across all six offices, including Melbourne, North Sydney and Miranda.
Contact us with your expiry date and current rate, and we’ll tell you whether the lender’s offer stands up.
Frequently asked questions
What happens if I do nothing when my fixed rate ends? The loan automatically rolls onto your lender’s variable revert rate. That rate is set by the lender and is usually higher than the variable rate the same lender offers to new customers, so doing nothing is almost always the most expensive option.
How early should I start looking at my options? Around three months before the fixed term ends. That leaves time to compare offers, lodge an application and settle a refinance before the revert rate starts applying.
Can I fix again when my current fixed term ends? Yes. You can refix with your existing lender, refix as part of a refinance to a new lender, or split the loan so part is fixed and part is variable.
Is there a fee to leave my lender after the fixed term ends? Break costs only apply if you exit during the fixed term. Once the term has ended there’s no break fee, though discharge and settlement fees of a few hundred dollars usually apply.