The day your fixed rate ends, something still happens
A fixed home loan period does not roll on automatically at the same rate, and it does not quietly move to whatever is cheapest on the market. When the fixed term finishes, your loan moves to another rate set by your lender. According to the ABC, that rate is typically your lender's standard variable rate.
That single sentence explains why fixed rate expiry catches so many borrowers out. The change is automatic, it does not require your signature, and the loan account itself looks unchanged — same lender, same balance, same direct debit. Only the interest rate moves. If your repayments were set to a fixed rate agreed one, two or three years earlier, the gap between what you were paying and what you are about to pay can be significant.
The practical point is this: expiry is a decision point, even though the default outcome requires no decision at all. Doing nothing is a choice, and it is the choice that leaves you on your lender's standard variable rate.
Why the jump can feel abrupt
Fixed rates are agreed at a point in time. Variable rates are not. Your lender's standard variable rate moves with the market, including movements in the Reserve Bank of Australia's cash rate, though lenders set their own variable rates and do not all move by the same amount, or on the same day.
The ABC has documented how large that gap can become. It reported that the RBA lifted the cash rate from a historic low of 0.1 per cent to 4.1 per cent within 13 months, a considerable shift in the interest rate landscape for borrowers coming off fixed terms agreed before that period. That is a historical example, not a forecast, and it is useful mainly as a scale: the rate you locked in and the rate available when it expires are set in two different worlds.
This is also why the calendar matters more than the paperwork. Your fixed rate has an end date from the day you signed, so the comparison you need to make is knowable months in advance.
Your four options at expiry
| Option | What it involves | What to check before committing |
|---|---|---|
| Do nothing | Your loan reverts to the lender's standard variable rate | What that variable rate is, and what your new repayment will be |
| Refix | Lock in a new fixed term with your current lender | The fixed rates on offer now, the term length, and any conditions attached |
| Refinance | Move the loan to a different lender | New rate, upfront costs, and whether switching costs outweigh the difference |
| Split | Divide the loan into separate accounts, with a portion fixed and a portion variable | Whether your lender offers it, and how the two portions are structured |
The ABC describes a split home loan as dividing your loan into separate accounts, so you can nominate a portion to have a fixed interest rate and the other a variable rate. In practice, splitting is a way of avoiding the all-or-nothing nature of the refix-or-variable decision. It does not remove the risk that rates move; it spreads it across two structures.
Refinancing is the option that involves the most work, because a new lender means a new application. Whether it is worthwhile depends on the difference between rates and the costs involved — both of which are specific to your loan size, your lender and your circumstances, and neither of which can be generalised here.
How to check what your rate will actually become
The question to answer first is narrow: what rate applies to my loan the day after the fixed period ends, and what does that mean for my repayment?
Find the end date. Your loan documents and your lender's app or online banking should show when the fixed period ends. If it is not obvious, ask your lender directly.
Ask for the revert rate. The rate your loan moves to is set by your lender, and your lender can tell you what it is. Ask for it in writing.
Ask what your repayment becomes. The rate is only useful once it is converted into a dollar figure over a fortnight or a month.
Compare against what is available now. Current fixed and variable rates are published by lenders, and the RBA publishes the cash rate. Anything you read, including this article, is a snapshot — rates change, and the rates available to you depend on your loan, your deposit history and your lender's own pricing.
Check the conditions, not just the number. Ask what happens with extra repayments, redraw or offset access on each option, whether break costs apply to a fixed portion, and whether any fees apply to changing your loan. These are questions to put to your lender; they are not things to assume.
Timing: plan a couple of months ahead
Mortgage Broker Brett Sutton told the ABC that borrowers should plan a couple of months ahead of their fixed-rate expiry. That is a sensible frame, because the useful work — getting the revert rate, comparing current rates, deciding whether to refix, refinance or split — takes longer than a week, and because applications and approvals do not happen instantly if you decide to move lenders.
Starting early also means you are not making the decision under pressure in the final days, when the consequence of inaction is simply landing on a rate you did not choose.
What to weigh, in plain terms
Rather than asking which option is "best" — a question no article can answer for you — ask which one fits what you are trying to manage:
- Certainty of repayment amount points toward fixing, because a fixed rate holds your rate steady for the term.
- Flexibility points toward variable, which is also the default if you do nothing.
- A bit of both points toward a split, subject to whether your lender offers one.
- A materially different rate elsewhere points toward refinancing, once the costs of switching are counted.
There is no obligation to act, and there is no guarantee that acting produces a better outcome. Rates move in both directions, and a decision that looks right at expiry may look different a year later. The point is to make the decision deliberately rather than by default.
Next steps
- Confirm your fixed term end date today.
- Ask your lender, in writing, what rate your loan reverts to and what your repayment becomes.
- Note the current fixed and variable rates available to you from your lender, and from at least one other.
- Decide whether you will refix, refinance, split, or stay on variable — before the end date, not after it.
- If you are considering refinancing, start the application early enough that approval is not the thing holding up the change.
If you want to look at current home loan options as part of that comparison, see /money/home-loans/.
General information only
This article is general information about how fixed rate expiry works. It is not legal, tax, credit or financial advice, and it is not a recommendation to refix, refinance, split or stay on variable. Interest rates, lender policies and loan conditions change, and which option suits you depends on your circumstances. Confirm rates, fees, terms and conditions with your lender or a licensed mortgage broker, and consider speaking to a financial adviser before making a decision about your loan. Australian Cash is not a lender, broker, government body or regulator, and does not set or approve loan rates.