What Happens When Your Fixed Rate Expires?

The short answer

When your fixed-rate period ends, your loan automatically rolls onto your lender's variable ("revert") rate unless you re-fix or refinance first. That revert rate is usually higher than the rate you fixed at, so your repayments typically jump, and they're recalculated over your remaining loan term rather than a fresh 30 years. If the variable rate later moves up or down, your repayments move with it.

How a fixed-to-variable rollover works in Australia

A fixed rate locks your interest rate (and therefore your principal-and-interest repayment) for a set term, commonly 1 to 5 years. During that window your repayment doesn't change even if the market moves. When the term expires, two things happen at once:

1. The rate changes. Your loan reverts to the lender's standard variable rate. As of the 2025–26 financial year, revert rates have commonly sat in the ~6%–7% range, while many borrowers who fixed in 2020–2022 locked rates near 2%. That gap is why rollovers can feel like a shock. Moneysmart explains the mechanics of fixed and variable rates.
2. The repayment is re-amortised. Your remaining balance is spread over the time left on the loan. So a 30-year loan that was fixed for the first 3 years recalculates over the remaining 27 years, at the new variable rate.

You generally have three choices at expiry: re-fix, stay on variable, or split the loan (part fixed, part variable). Lenders often suggest comparing 2–3 months before the fixed term ends so you aren't parked on the revert rate by default. There's no universally "better" option here; it depends entirely on your situation. See fixed vs variable: total cost for how to weigh them.

Worked example: a $600,000 loan rolling off a fixed rate

Say you borrowed $600,000 over 30 years and fixed at 5.5% for the first 3 years.

Stage	Rate	Term applied	Monthly repayment
Years 1–3 (fixed)	5.5%	30-year schedule	$3,407
Balance at end of year 3	—	—	~$574,359 owing
Year 4 onward (variable)	6.0%	remaining 27 years	$3,584

The maths is checkable. At 5.5% the $600k repayment is ~$3,407/month, and after 36 payments you've paid the balance down to about $574,359. Re-amortising that $574,359 at 6.0% over the remaining 27 years gives ~$3,584/month, roughly $177 more per month, or about $2,124 a year. (For comparison, a fresh $600k at 6% over 30 years is ~$3,597/month, which is True Loan's standard reference figure.)

If the revert rate were higher, the jump is larger. The exact number always depends on your balance, the new rate, and your remaining term.

Model this in True Loan

True Loan's engine reads a time-indexed rate schedule, so a fixed→variable rollover is built in and you don't have to do two separate calculations.

At trueloan.app:

• Set Loan amount to $600,000 and Term to 30 years.
• Enter your fixed rate (e.g. 5.5%) and the fixed period (e.g. 3 years), then the variable rate it reverts to (e.g. 6%).
• Read off the repayment before and after the rollover, plus total interest over the life of the loan and the remaining-debt timeline.

To stress-test, raise the variable rate and watch the repayment move. If you'll hold savings against the loan, use the dedicated Offset balance input; see how much an offset saves on a $600k loan. To pay it down faster, use the separate Extra repayment ($/month) input.

Thinking of switching at expiry? Build the revert scenario and a refinanced scenario and put them side by side at trueloan.app/compare. Is refinancing worth it for a 0.5% lower rate? walks through that comparison.

Common questions and mistakes

Do my repayments reset to a fresh 30 years? No. The remaining balance is spread over the time left, not a new full term, unless you refinance into a brand-new term.

Will my repayment definitely go up? Usually, because revert rates have been higher than recent fixed rates. But if you fixed at a high rate and variable rates have since fallen, it could drop. Model both.

Can I refinance to avoid the revert rate? Once the fixed term ends, you can generally switch without break costs. Refinancing before expiry can trigger break fees. Switching home loans covers this.

Does the bank tell me the new rate? Lenders typically notify you ahead of expiry. Always confirm the actual revert rate rather than assuming it.

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Figures here are estimates for the 2025–26 financial year and depend on your lender, balance and term. This is general information, not financial or credit advice. Check official sources like moneysmart.gov.au and confirm rates with your lender before deciding.