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What happens when your fixed rate ends?

If you currently have, or are considering taking a fixed rate loan you may be wondering what happens when the fixed rate ends.

At the end of the fixed rate term the loan will automatically roll onto a variable interest rate - and this likely won't have a discount applied so its important that you do reach out and choose a different option.

Around a month before the end of the fixed period you'll likely hear from both your bank and broker advising you of your options; essentially;

  • the bank will write and offer some new fixed options (no - sadly you can't re-fix at the same rate you previously had)

  • they may include a discounted variable option as well

  • and your broker will invite you to contact them and review this in comparison to the broader market.

When you get this letter, send a copy to your broker and lets discuss

Is the new offer competitive?

Is the loan structure still suitable?

Would you like to change the splits

Do you need to make any additional changes.

Before considering a new fixed period its worth thinking about any impending changes you're expecting, such as selling a property or receiving a large amount of money. You won't want to lock yourself into something that isnt going to suit you moving forward.

What you absolutely should not do is "roll off" onto what the bank call their "Standard variable rate" as this is rarely the most economic interest rate available to you. In fact - most of us are receiving discounts of between 1% and 3% off of this interest rate and this is much more budget friendly.


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