Over the past few years, thousands of Australian homeowners locked in ultra-low fixed-rate home loans to shield themselves from rising interest rates. But as we head through 2025, many of these fixed-rate periods are ending—and the shift back to higher variable rates is catching some borrowers off guard.
If your fixed-rate mortgage is expiring soon, now is the time to get proactive. With rates having stabilised—but at higher levels than the historic lows of 2020–2022—it’s crucial to understand your options and make a plan that aligns with your current financial goals.
Here’s what you need to know, and what you should do next.
What Happens When Your Fixed Rate Ends?
When your fixed-rate period finishes, your home loan will typically revert to your lender’s standard variable rate (also called the revert rate). This rate is often significantly higher than the rate you were paying—and higher than competitive rates currently available in the market.
In 2025, we’re seeing revert rates of around 6.5%–7.2%, depending on the lender. For many borrowers coming off fixed rates of 2–3%, this shift can result in a sharp increase in monthly repayments.
For example:
- A $600,000 loan at 2.2% interest: ~$2,280/month
- The same loan at 6.5% interest: ~$3,800/month
That’s a difference of over $1,500 per month.
This phenomenon—dubbed the mortgage cliff—can place serious strain on household budgets. But the good news is: you have options.
Review Your Loan Terms Early
The best time to act is 2–3 months before your fixed rate expires. This gives you time to:
- Assess your financial situation
- Compare refinance options
- Renegotiate with your current lender
- Avoid being automatically rolled onto a high revert rate
Tip: Your lender will usually notify you of your fixed-rate expiry 4–6 weeks before the date. Don’t wait for that letter—speak to a broker well in advance.
Refinance to a More Competitive Loan
If you’re rolling onto a high revert rate, now may be the perfect time to refinance to a lower variable rate loan with another lender.
Benefits of refinancing include: ✅ Lower interest rate = reduced repayments
✅ Access to features like offset accounts or redraw
✅ Opportunity to restructure your loan to match your goals
✅ Potential to release equity for renovations or investments
In 2025, variable rates are averaging between 5.75%–6.00% for owner-occupiers (with principal & interest repayments and 80% LVR or lower). That’s often 0.75–1.5% lower than most revert rates.
Tip: Be aware of discharge fees, break costs (if exiting a fixed term early), and whether your current lender charges ongoing fees. A broker can help you calculate your “real” savings.
Negotiate With Your Current Lender
If you’re happy with your current lender but not the rate they’re offering, you can ask for a rate reduction or reprice—especially if you’ve built up equity or have a good repayment history.
Lenders are increasingly willing to match competitor rates to retain existing customers. Your broker can handle these negotiations on your behalf, using your current situation and competitor offers as leverage.
Tip: Even if the reduction isn’t massive, shaving 0.25%–0.50% off your rate can save you thousands per year.
Consider Fixing Again (But Be Strategic)
With interest rates stabilising in 2025 and the RBA adopting a more neutral stance, some borrowers are considering fixing their interest rate again—especially if they value repayment certainty.
Fixed rates for 1–3 years currently sit around 5.29%–5.54%, depending on the lender and product. That’s lower than some variable offers.
Before fixing:
- Consider your cash flow, goals, and how long you plan to stay in the property
- Understand the pros and cons: fixed loans often lack features like offset accounts or flexible repayments
- Understand that if variable rates continue to come down the fixed rates may be higher than the variable rates on offer down the track
- Avoid fixing 100% of your loan if you want flexibility—split loans can offer a good compromise
Tip: A split loan allows you to fix part of your loan for certainty, while keeping the rest variable to take advantage of flexibility or future rate changes.
Reassess Your Loan Structure
Now is also a great time to review your overall loan setup, especially if your goals or circumstances have changed since you first locked in your fixed rate.
Ask yourself:
- Do I need features like an offset account or redraw?
- Should I switch from interest-only to principal & interest?
- Is this property becoming an investment property in future?
- Should I use equity to invest or renovate?
Making the right structural decisions now can save you money and give you greater control over your finances going forward.
What If You’re Struggling With the New Repayments?
If your repayments are increasing and you’re concerned about managing cash flow, you’re not alone. Many Australian households are feeling the pressure.
What you can do:
- Speak to your broker ASAP—we may be able to help refinance or restructure your loan for relief
- Review your budget to free up cash where possible
- Talk to your lender about temporary hardship support (but only if after talking to a broker and considering other options)
Don’t suffer in silence—early action is key to avoiding more serious financial issues.
The Bottom Line: Don’t Let the Revert Rate Catch You Off Guard
If your fixed-rate loan is coming to an end in 2025, taking action early can help you avoid unnecessary repayment shock, save on interest, and ensure your home loan remains aligned with your goals.
At Hatch Financial Services, we help homeowners across Australia navigate the end of fixed-rate periods with confidence—whether that means refinancing, restructuring, or renegotiating a better deal.
Let’s Review Your Loan—Before the Fixed Rate Ends
Book a free consultation with Hatch Financial Services today. We’ll review your loan, compare the best options, and help you make the right move—before your fixed rate expires.
