Case study: rolling off a 1.99% fixed rate without repayment shock

The situation

A couple in Melbourne's inner north — one PAYG on a stable salary, one part-time with a young child — had fixed $612,000 at 1.99% during the low-rate period. Their fixed term was ending and their lender's letter quoted a revert rate of 7.34%.

On their balance, the difference between 1.99% and 7.34% was around $1,600 a month in repayments. They were understandably alarmed.

The challenge

• Household income had reduced while one partner was working part-time
• Repayments were about to more than double against the fixed-period figure
• The property had grown in value but they had never had it revalued
• Their existing lender's retention offer was 6.84% — better, but not competitive

What we did

We ordered upfront valuations with three lenders before lodging anything. The property came back at $915,000, which put the LVR at 67% — comfortably under 80% and into the sharpest pricing tier.

We ran the retention offer against the market. Their own lender's 6.84% was beaten by 6.09% elsewhere with a full offset and no annual package fee. We also matched the new loan term to the 27 years remaining rather than resetting to 30, so the lower rate translated into genuine savings instead of a stretched-out loan.

The outcome

• Refinanced at 6.09% variable with a 100% offset account
• Repayment landed roughly $260 a month below the revert-rate figure
• Term matched to the remaining 27 years, not reset to 30
• Around $9,400 in interest saved over the first three years
• Settled 24 days after application, before the fixed rate expired

What we'd tell someone in the same position

Start 60 to 90 days before your fixed term ends. That's enough time to get a valuation, compare lenders properly and settle before the revert rate applies — without being rushed into whatever your current lender puts in front of you.

And always ask your existing lender for a repricing first. Even when you intend to leave, a written retention offer is useful leverage.