Many borrowers who fixed their loans during 2020-2022 are now facing higher repayments.
Learn what happens when a fixed rate ends and how to prepare early.
See how refinancing, budgeting, or renegotiating could help.
An Aussie Broker can help you review your options before your rate expires.
Many Australians who locked in historically low fixed rates between 2020 and 2022 are now reaching the end of those terms in 2025.
As these fixed periods expire, borrowers may move to variable rates that are typically 1–2 percentage points higher than their previous fixed rate, creating a sharp increase in monthly repayments.
As of November 2025, the Reserve Bank of Australia (RBA) has kept the cash rate steady since late 2024, lenders continue to adjust variable rates independently, meaning not all customers are affected equally.
Refinancing activity has increased as many borrowers look for more competitive options.
What happens when a fixed rate ends?
When your fixed term expires, your loan automatically reverts to your lender’s standard variable rate, unless you arrange a new fixed or variable loan beforehand.
Revert rates are often higher than current market rates, sometimes by around 1-2 percentage points.
If your fixed term is ending soon, it’s worth comparing options early to avoid rate shock.
Example:
If your $600,000 home loan was fixed at 2.19% in 2021, and reverts to a 6.5% variable rate in 2025, your repayments could rise by around $1,200 per month (based on a 25-year term).
Example only. Figures are indicative and for general illustration. Actual outcomes depend on your loan type, interest rate, and lender. Speak with your broker or lender for personalised guidance.
Use our Mortgage Repayment Calculator to see how a rate change could affect your repayments.
How to prepare for higher repayments
Rising repayments can feel daunting, but taking steps early can help you manage the transition.
1. Review your budget and cash flow
Start tracking your expenses at least three months before your fixed rate ends. Identify non-essential spending and consider redirecting any surplus cash toward your loan.
Why it helps: It gives you a clearer view of what you can comfortably afford when repayments increase.
2. Contact your lender or broker early
Reach out to your lender or broker at least two months before your fixed rate ends to review your options.
Your Aussie Broker can help:
explain what your revert rate will be,
compare it against other lenders’ offers, and
negotiate a more competitive deal.
Why it helps: Early conversations give you time to compare and switch if needed.
3. Consider refinancing your loan
If your fixed term is ending, refinancing can help you find a more suitable rate or loan structure.
Typical refinancing timeline:
2 months before expiry: Review your fixed term and gather documents.
6-4 weeks out: Compare loan options and submit applications.
2-3 weeks out: Loan approval and settlement.
Refinancing can help you:
move to a competitive variable rate
consolidate debts for simpler repayments
restructure your loan (e.g., split fixed/variable)
Example:
After her fixed rate ended, Maria refinanced a $500,000 loan from 6.7% to 6.1% p.a. She reduced her repayments by around $190 a month and gained an offset account to manage her savings.
Example only. Actual outcomes depend on lender, loan type, and personal circumstances.
4. Use an offset or redraw facility
If you have savings, placing them in an offset account or making extra repayments can reduce your interest costs without committing to larger fixed payments.
For example, having $20,000 in an offset account on a $500,000 loan could save thousands in interest over time.
Why it helps: Every dollar in your offset works as if you’ve made an extra repayment.
5. Make extra repayments (if you can)
If your budget allows, start making slightly higher repayments now while your fixed rate is still active. This can soften the impact when your new rate takes effect.
Why it helps: It builds a repayment buffer and reduces your loan balance faster.
Try our Extra Repayments Calculator to see how small increases can make a big difference.
Borrower scenarios: How others are adapting
First-home buyer
Jasmine fixed her first home loan in 2021 at 2.29%. When it reverted to 6.4% in 2025, her repayments rose by $1,000 per month.
By switching to a split loan and using an offset account, she reduced her interest costs and managed her cash flow more easily.
Investor
Alex owns two investment properties. When his fixed rates ended, he refinanced both under a single lender to access equity and simplify repayments.
He also reviewed his depreciation schedule with his accountant to optimise deductions.
Family with an offset account
Sam and Priya used savings in their offset account to help absorb higher repayments when their fixed loan ended.
They kept their budget steady by maintaining their repayment level from the lower-rate period.
Can you renegotiate with your current lender?
Yes. Many lenders offer retention pricing or loyalty discounts for existing customers nearing the end of a fixed term.
Your broker can request a rate review or negotiate directly with your current lender to secure a more competitive rate without refinancing.
Pros of staying with your lender:
Faster process, no discharge or setup fees
Keeps your loan features intact
Cons:
May miss out on sharper rates available elsewhere
Key takeaway: It’s worth comparing both options, staying and switching, before deciding.
What if you can’t refinance?
If you’re unable to refinance due to lower income, reduced property value, or credit changes, there are still options.
Potential alternatives:
Hardship support: Speak with your lender early about temporary arrangements.
Interest-only period: Some lenders may allow a short-term switch to ease repayments.
Budget review: Consider reducing other debts or expenses until your position improves.
Key takeaway: Early communication with your lender or broker can help you manage challenges before they escalate.
Plan ahead, don’t wait until your fixed rate ends expiry
The sooner you act, the more control you’ll have over what happens when your fixed rate ends.
Start reviewing your loan at least two months before expiry, compare options, and consider refinancing or renegotiating to find a more suitable rate or structure for your situation.
Book a free^ chat with an Aussie Broker to review your options before your fixed rate ends.
