The "Rate Cliff" Explained
When your fixed rate home loan term ends, your lender automatically rolls you onto their Standard Variable Rate (SVR) — also known as the revert rate. This rate is almost always significantly higher than both their best new-customer variable rate and what's available from competing lenders.
The "rate cliff" refers to the sudden jump in repayments that occurs when a borrower falls off their fixed rate and onto the SVR without taking any action. On a $600,000 loan, the difference between a 6.1% fixed rate and a 7.4% revert rate is approximately $490 per month in extra interest.
What Happens Automatically When Your Fixed Rate Expires
Unless you take action, this is exactly what happens on expiry day:
- Your loan rolls automatically to the lender's Standard Variable Rate (SVR)
- Your monthly repayment amount changes immediately
- You may lose the offset account or redraw facility you had under fixed (if it was a fixed-only product)
- No break costs apply — you're now free to refinance or renegotiate
- You receive a letter or email notifying you (often after the fact)
Revert Rate vs Comparison Rate
Comparison rates include all fees and charges but are calculated based on a hypothetical 25-year, $150,000 loan — which understates the real impact. The revert rate (SVR) is the pure interest rate that applies once fixed expires. They are different numbers, and both are lower than the rate that actually applies to you if you've done nothing.
| Rate Type | What It Represents | Typical 2026 Range | Action Required |
|---|---|---|---|
| Fixed Rate | Locked rate during fixed term | 5.5–6.5% | None (term is running) |
| Revert Rate (SVR) | Rate you roll to at expiry if you do nothing | 7.0–8.0% | Urgently negotiate or refinance |
| Lender's Best Variable | Best rate your lender offers to new customers | 6.0–6.8% | Ask for this rate directly |
| Market Best Variable | Best rate available from any lender | 5.7–6.4% | Refinance to achieve this |
The 90-Day Review Rule
Set a calendar reminder 90 days before your fixed term expires. This gives you:
- Time to shop: Get quotes from 3–5 lenders or use a broker to compare the market
- Negotiating leverage: You can threaten to leave — and mean it — because you have time to follow through
- No urgency gap: Refinancing typically takes 4–8 weeks; 90 days is enough runway
- No break costs: You're not breaking your fixed term, so there's no fee for reviewing options
Your Three Options: Compare, Negotiate, Refinance
| Option | Best When | Effort | Potential Saving | Timeframe |
|---|---|---|---|---|
| Stay and do nothing | Never — this is the worst outcome | None | None | Immediate |
| Negotiate with current lender | Market rate gap is <0.3%; you like your lender | Low (1–2 calls) | 0.2–0.5% | 1–5 days |
| Refix with current lender | Current lender's fixed rate is competitive | Low | Depends on rate | 1–7 days |
| Refinance to new lender | Market gap is >0.4%; cashback available; want offset | Medium (broker can handle) | 0.4–1.5%+ | 4–8 weeks |
How to Tell 90 Days Before Your Expiry
Many borrowers don't know their exact fixed rate expiry date. Here's how to find it:
- Check your original loan documents — the fixed term and end date will be specified
- Log into your lender's online banking portal — most display the fixed rate expiry date on the account summary page
- Call your lender and ask — they must disclose this information
- Check the annual statement your lender is required to provide
Broker vs Direct Approach at Expiry
You can negotiate directly with your lender, but a broker adds value at this stage because:
- They can compare your current lender's best offer against 30+ other lenders simultaneously
- They know which lenders are currently offering cashback deals that can offset refinancing costs
- They handle the paperwork and lender communications, saving you 10–15 hours of admin
- Their service is typically free — paid by the lender via trail commission
Frequently Asked Questions
Fixed Rate Expiring Soon?
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