Fixed Loan Expiring: Break Now or Wait?

90 days before expiry: collect the facts

Confirm the exact fixed-period end date, outstanding balance, remaining loan term and what happens if you do nothing. A fixed loan usually changes to the lender's variable or revert rate unless another arrangement is made. Request the actual proposed rate and repayment, not a generic website headline.

Ask for a dated written early-repayment or break-cost quote, its validity period and any other exit fees. Break costs can be high and change with market conditions; ASIC Moneysmart notes that greater falls in interest rates since fixing can mean higher fees. A recent rate rise does not prove your individual break cost is zero.

• Get the fixed end date and revert-rate offer in writing.
• Collect loan statements, income evidence, expenses and property information.
• Check repayment limits, offset/redraw conditions and discharge timing.

60 days before expiry: compare three paths

Path one is to ask your current lender to reprice or offer a new product. Path two is to refinance before expiry, including the quoted break cost. Path three is to wait until the fixed period ends and switch then. Compare features, eligibility and costs as well as the rate.

Keep the remaining term consistent. Restarting a loan over 30 years can reduce the monthly payment but increase lifetime interest. Advertised live panel rates are a starting point, not a guaranteed personal offer; confirm LVR, purpose, repayment type, fees and property acceptance.

• Current lender: proposed rate, fees, term and features.
• Early switch: break quote plus discharge, application, valuation, registration and any LMI costs.
• Wait: remaining fixed repayments, expiry-date offer and switching costs after expiry.

A worksheet for the early-exit decision

Write down the months left in the fixed period. Compare costs over that same horizon using your actual balance, term and quoted rates, rather than multiplying an advertised percentage by the original loan amount. Track interest and remaining balance as well as repayments, so faster principal reduction is not confused with a saving.

As a deliberately simplified illustration, if switching costs total $3,000 and a like-for-like comparison estimates a $150 monthly benefit, simple break-even is 20 months. With only six months left on the fixed period, that arithmetic does not justify breaking early on savings alone. This is not a lender break-cost quote or a promise of savings; rates, balances and timing can change.

Use the refinance break-even calculator as a planning estimate, then have the broker compare early switching against waiting and negotiating. A cash-back offer or lower payment should not hide fees, restrictions or a longer term.

30 days before expiry: confirm the execution plan

Do not assume a refinance will settle on an exact date. Confirm approval conditions, discharge arrangements and settlement timing before making changes to the current loan. If you are waiting until expiry, ask how the lender treats an early settlement and whether the break quote needs updating.

After expiry, an early fixed-period break cost generally no longer applies for that expired period. That does not make refinancing free: discharge, registration, new-loan fees and potentially LMI can still apply. Check the lender's written payout figure and final product terms.

• What happens if settlement is delayed?
• Are the new rate and fee offer still valid?
• Is the repayment compared over the same remaining term?
• Have any offset funds, direct debits and linked accounts been accounted for?