Q: I have a fixed and variable home loan which ends next year. What happens when the fixed term ends? Will I be charged to go on a fixed and variable term again?
A: There’s a bit to know about fixed interest rates because they are set up different to variable rates. Generally speaking, when a fixed term ends on a home loan the mortgage typically reverts to the standard variable interest rate. But that doesn’t mean it has to.
If you have a mortgage broker I’d give them a call to check the fine print and confirm that’s what will happen. Otherwise, give your lender a call directly and ask them to confirm exactly what the ‘revert rate’ is – that means the interest rate your fixed home loan will change to at the end of your fixed loan period. There shouldn’t be any charges associated with this, but you should ask that question as well.
I’d also ask your bank or lender for a better interest rate. The mortgage market is hugely competitive right now, and chances are you just might be able to either negotiate an ever better rate with your lender, or if they won’t come to the party find another lender who will.
The end of your fixed rate mortgage is an opportunity to review your personal and financial circumstances and needs and set your home loan up to suit what they are now and not what they were when you chose a split home loan however many years ago.
Do you want to go on another fixed term for all or part of your mortgage? Do you want to keep your home loan variable? Do you want to split your home loan again? Do you want to review your options and refinance to another lender?
Taking the opportunity when you have it to make sure your home loan is set up how you need it is smart.
If you don’t have a mortgage broker but want some free, expert assistance you can request an appointment and one of our accredited mortgage brokers will be in touch to help you work out what’s right for you. They can even try to negotiate a better deal with your current lender on your behalf.
It pays to be organised and know what you want to do before your fixed term ends. Starting your research around two months before should put you in a good position and give you enough time to assess your options carefully.
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