Are you prepared for the end of
your fixed rate?
Interest rates in Australia were at a record low in 2020. So if you’re one of the many Aussies who chose to fix your home loan interest rate, it’s likely you’ll see a significant increase in your mortgage repayments when your fixed rate expires.
If you don't take action, it could add some stress to your financial situation. There are things you can do to reduce the impact on your financial situation. Let's take a look at what happens when your fixed rate expires, and what actions you can take to prepare.
What to expect.
- What happens in the lead up to my fixed rate ending?
If you’ve chosen a fixed interest rate on your home loan, your repayments will remain the same for the duration of the fixed term. Before your fixed term expires, a Beyond Bank representative will contact you over the phone to discuss your options. This call is usually eight to ten weeks before the fixed-rate period expires. If we’re unsuccessful in contacting you, we’ll send you a letter with all the details. - What information will I receive?
The letter you receive will contain everything you need to know. This includes your new repayment amount, due date and interest rate. - What are my options?
You may have the option to re-fix for another term, convert to the current variable rate or even look at splitting your loan to get the best of both worlds. If you haven't provided us with alternate instructions, your loan will revert to a variable rate when your fixed term expires. - What action do I need to take?
It’s important to review your current repayment arrangements and increase your repayments before your new due date, if required. - Talk to us.
We’ll discuss your options based on your situation, and together, we’ll work out the best option for you moving forward.
Prepare by reviewing your budget.
Regularly reviewing your general household expenses is always a good idea.
Be sure to track your spending so you can understand exactly where your money is going. If your mortgage repayments increase, you’ll be in a great position to know where you can cut your costs first.
Prefer to talk it through with an expert? Book in a chat
Frequently Asked Questions.
Yes, you can! Read more about our options for refinancing here.
There are reasons why some borrowers prefer to fix their loans again. It may be because they are concerned that rates will continue to rise. The other reason is that some people like the security of knowing what their repayment will be for the next 1, 2 or even 5 years depending on the term they fix their loan for.
If you choose to go with the Variable Rate, you still have the option to fix your loan for timeframes between 1-5 years at any time.
Yes, you can.
With a variable rate loan, you can make extra repayments either as an increase to regular repayments or as a lump sum payment at any time.
With a fixed rate loan, you can pay up to $25,000 p.a. on each fixed rate loan without fee or penalty. Additional repayments over $25,000 per year to a fixed rate term will result in a break cost being payable.
If you decide to revert to an eligible variable rate home loan, you may consider linking a Mortgage Offset Account. The Mortgage Offset Account can be used as a full transaction or savings account. The balance in this account is offset against your loan balance, reducing the interest payable on that loan and helping you save interest and pay off your loan sooner.
Yes, you can! Talk to your Relationship Consultant or call us on 13 25 85 about splitting your loan between Variable and Fixed portions.
Variable Rate Loans: You can change at any time without break costs. Other fees such as a Discharge Fee may be applicable.
Fixed Rate Loans: You may have a break cost fee, which can be calculated upon request.
We do offer interest only options, but this is generally for investment loans only. Switching to interest only also requires a new credit assessment by our team to determine suitability. If you would like to explore this option for an investment property, we're here to help.
Possibly! Depending on your circumstances, you may be able to combine your liabilities. Talk to your Relationship Consultant about your options or give us a call on 13 25 85.
Fixing a loan is a personal decision. You'll need to consider your financial position and your plans and goals over the next few years.
Some people like the consistency of knowing what their repayments are over a period, so a fixed loan is ideal for them. However, if your situation changes you may be required to pay break costs if you need to break your loan, which is less than ideal. You should also consider that with a fixed loan, you can only make $25,000 in additional repayments per year.
Ultimately the decision to fix a loan is up to you. Talk to your Relationship Consultant or give us a call on 13 25 85 and we can help you navigate your options.
