Executive Summary: The "Revert Rate" Trap
When your fixed term ends, your loan does not disappear. It converts to a Variable Loan. But it doesn't convert to the best variable rate. It converts to the Reference Rate (or Revert Rate).
Current Market Variable Rate: ~6.10%
Bank "Revert" Rate: ~8.50%
Difference: 2.40%
On a $500,000 mortgage, falling onto the Revert Rate costs you an extra $1,000 per month in interest. The bank relies on your inertia to make this profit.
Part 1: The 90-Day Timeline
You cannot wait until the day of expiry. The banking system moves slowly. Here is the optimal timeline for managing your roll-off.
90 Days Out (The Research Phase)
Start checking your email. Your bank is legally required to notify you that your fixed term is ending.
Action: Contact us. We will run a "Borrowing Capacity Check" to see if you are eligible to refinance to a new lender. If your income has dropped or you changed jobs, we need to know now.
45 Days Out (The Negotiation Phase)
We approach your current bank. We ask: "What discount margin will you offer this client to stay?"
Often, the bank will offer a "Retention Discount" (e.g., 1.50% off the Revert Rate) to keep you from leaving. We get this offer in writing.
30 Days Out (The Decision Phase)
We compare:
Option A: Stay with current bank (Retention Offer).
Option B: Refinance to a new lender (New Client Offer + Cashbacks).
If Option B saves you significant money, we submit the discharge forms now so the switch happens exactly as your fixed rate expires.
Part 2: Should I Fix Again or Go Variable?
In 2026, the economic landscape is different from when you last fixed. The decision comes down to your view on Interest Rate Cycles.
Variable Rate
Pros: Flexibility. You can sell the house, pay off the loan, or refinance without penalty. If the RBA cuts rates, your repayment drops immediately.
Cons: If the RBA raises rates, your payment goes up. Cash flow uncertainty.
Fixed Rate
Pros: Certainty. You know exactly what you pay for 2 years.
Cons: The "Break Cost" trap. If you sell or refinance, you pay a penalty. If rates drop, you are stuck paying the higher rate (regret risk).
The 2026 Consensus: Most experts suggest that if we are at the "Peak" of the rate cycle, locking in a fixed rate might prevent you from benefiting from future rate cuts. Variable offers the flexibility to ride the curve down.
Part 3: The "Split Loan" Hedge
You don't have to choose one or the other. You can have both.
The Strategy:
50% Fixed: Locks in a known cost for half your debt.
50% Variable: Gives you an Offset Account to save interest and allows you to benefit if rates fall.
This is the "Sleep at Night" strategy used by many conservative investors.
Part 4: What if I can't refinance? (Mortgage Prison)
If your property value has dropped (LVR > 80%) or your income has decreased, you might not pass the serviceability test for a new lender. (See our guide on "Mortgage Prisoners").
In this scenario, Retention Negotiation is your only tool. We must aggressively lobby your current bank to apply a discretionary discount to your variable rate, using your payment history as leverage.
Part 5: Frequently Asked Questions (FAQ)
No. They will never automatically roll you into another fixed term. They always roll you to Variable. You must actively request a new fixed rate if you want one.
Generally, no. Once the fixed date passes (e.g., 20th November 2026), the "Break Cost" falls to $0. You effectively become a free agent on the 21st of November.
Yes, this is called a "Rate Lock" with a forward booking. We can apply for a refinance up to 90 days before your expiry. We hold the new loan in "Approved" status and schedule settlement for the exact day your current loan expires.
Conclusion: Don't Auto-Renew
The "Loyalty Tax" is real. Banks make their biggest margins on customers who let their fixed rates lapse into the Standard Variable Rate.
Set a calendar reminder for 3 months before your expiry date, and call us then.