Fixed Rate Expiry Refinancing

Start 90–120 days before expiry. Your lender sends a letter around that time confirming the expiry date and the variable rate you’ll roll to. That’s the signal to call Andy and compare the market. If you wait until the week before expiry, you won’t have time to complete a refinance application, get valuation and credit checks done, and settle the new loan before the term ends — which means you’ll roll to variable for a few weeks or months while the refinance processes. Starting early gives you the full expiry window to make a decision without time pressure.

You automatically roll to your lender’s standard variable rate. That rate is typically 0.30–0.80% higher than the best variable rates advertised to new customers, and it can change each month if the lender adjusts rates. You keep the same loan structure (repayment amount, loan term, features), but the interest rate resets to whatever the lender’s standard variable is on the day your fixed term ends. You’re not locked into that rate — you can refinance any time after expiry — but you’ll be paying the higher rate until you do.

You can re-fix with your current lender — most banks let you lock a new 1–5 year fixed term when your existing term expires. The rate they offer should be their current advertised fixed rate for your loan type and LVR, not a special retention rate. Andy checks whether your bank’s re-fix rate is competitive against the rest of the market. If it is, re-fixing in place is simple — no application, no valuation, no switching costs. If the rate’s not competitive, switching lenders to lock a lower fixed rate makes sense even after paying the $1,200–$1,800 in refinance costs.

The retention rate is often better than the standard variable rate you’d roll to, but it’s usually still 0.20–0.50% higher than the rates new customers get with the same bank or with other lenders. Andy compares the retention offer against 6–12 other lenders’ current rates. If your bank’s offer is within 0.10% of the best market rate and switching would cost $1,500+ in fees, the retention rate might be worth taking. If it’s 0.30%+ above market, switching pays for itself in under 12 months and you gain better loan features (offset, lower fees) at the same time.

No — once the fixed term ends, break costs don’t apply. Break costs only exist during the fixed term if you refinance, sell, or make large extra repayments before the expiry date. The expiry window is the one time you can refinance penalty-free. If you refinance even one day after the fixed term expires, there’s no break cost. That’s why Andy recommends starting the refinance review 90 days before expiry — so the new loan can settle on or just after the expiry date with no penalty.

Expiry is the ideal time to adjust your loan structure — you’re already reviewing the loan, and refinancing lets you change the loan amount, add an offset, switch from principal-and-interest to interest-only (or vice versa), or release equity for renovations or investment. Andy structures the new loan to suit what you need next: if you want to pull $50,000 for a kitchen reno, the refinance increases the loan and you settle with the equity in hand. If you want offset access that your fixed loan didn’t allow, the new variable loan includes it. Changing structure mid-term (before expiry) usually triggers break costs; doing it at expiry is penalty-free. See cash-out refinancing for the full process.

A straightforward refinance takes 2–4 weeks from application to settlement if your income/employment is standard and the property valuation comes back at or above the lender’s requirement. If you’re self-employed or the lender needs additional documentation, add 1–2 weeks. Andy lodges the application 60–90 days before your fixed term expires so the new loan settles on or just after the expiry date. If you start too late and the new loan doesn’t settle before expiry, you’ll roll to variable for a few weeks while the refinance completes — not a disaster, but avoidable with early timing.

Depends on where you think rates are going and how much flexibility you need. If you think rates will rise or you want repayment certainty, re-fixing locks your rate for another 1–5 years — mid-2024 fixed rates are ~5.9–6.5% depending on LVR and term length. If you think rates will fall or you might sell/pay down the loan in the next 1–2 years, variable gives you flexibility and full offset/redraw access with no break costs. Andy doesn’t predict rate movements — he explains the trade-offs so you can decide based on your plans, not speculation.

Expect $1,200–$1,800 total: discharge fee to your old lender ($300–$400), valuation if required ($200–$350, sometimes waived), and settlement agent fees in WA ($800–$1,200 if the new lender requires one). Application fees with the new lender are often waived. If switching saves you 0.40% per year on a $500,000 loan, that’s ~$2,000 per year in interest saved — the up-front cost is recovered in 9–12 months and you keep the savings every year after.