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Jackson S.
Jackson S.
Beenleigh, QLD

If I go for a 2 or 3 year fixed rate, what happens to the rate when it finishes?

3 years ago


Hi Jackson
After the fixed interest term it usually reverts to the standard variable interest rate at that time unless you renogotiate an extension prior to the end of term. The variable rate will depend on which direction the RBA moves rates if at all. Most economists are indicating a downward direction. The banks can of course adjust it as they please due to cost of funding rising (so they say). I dont believe it will be a big difference either way.
Happy to catch up and explain in person or chat on the phone if you wish.
I hope this helps
Kind regards Paul

Hi Jackson,
Paul is correct, most fixed rates revert to the standard variable rate at the end of a fixed term.
These standard variable rates are among the least competitive in the market and you should ensure that you have plans in place to switch to a better product or refinance before your fixed rate expires.
Discuss the benefits of a fixed rate with your broker and make your choice based on your individual position and needs.
Best of luck

Hi Jackson,
Paul and Scott are both correct and you should revert automatically back to the variable rate of the bank. You can check this by ringing the bank or checking your original contract or contacting your Broker :)
I contact all my clients on a fixed rate approx two months before expiry to do a Loan Health check and go over their financial position to see what changes have occurred since the loan was originally fixed.
Also the variable rate of that bank may be higher than what you need to be paying and you could look at either re-fixing it again or refinancing again to another bank.
Happy to peruse your contract or statements to see if I can help.

Loans have what is called a 'revert to rate' - often it is the standard variable rate but in plenty of cases it is something else. This is why you will see plenty of fixed rate loans with high comparison rates (comparatively) as the revert to rates are much higher than the fixed parts.

However, you don't need to stay with the lender post the fixed rate period so it may end up being a moot point anyway.

If you do product searches at unohomeloans.com.au and drill into the product details pages for an individual product you will see the revert to rate in there in most cases. If not you can ask us for that information also

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