9 ways to prep before your fixed interest rate period ends

Estimated reading time
 6 min

In this article

• What happens after my fixed interest rate period ends?
• 9 ways to help you prepare for your fixed interest rate period ending
• Where to get help

Wondering what happens after your fixed interest rate period ends? You’re not alone.

And while it’s likely this will mean some changes for you and your home loan repayments, the good news is there’s plenty of things you can do now to prepare for when your fixed interest rate period finishes.

Even if you don’t have a fixed rate loan - perhaps yours is variable - but you are looking for ways to help you save some cash here and there, below are some tips to help you manage your home loan.

But first, what is a fixed rate loan? In case you need a refresher – a fixed rate home loan means the interest rate on your home loan remains the same for an agreed period of time (the fixed interest rate period). When this ends, your loan will automatically roll to a variable interest rate. Alternatively, you could consider re-fixing your home loan.

What happens after my fixed interest rate period ends?

Fixed rate loans give you certainty in your repayments – helping you plan ahead and stay on top of your finances. And if you’ve taken advantage of record-low interest rates in recent years, you’ve likely saved yourself some money. But if your fixed interest rate period is ending soon, it’s time to think about what happens next.

If you’re unsure about what happens next and how to be prepare for that, talk to your bank or loan provider – they’ll be able to let you know the details of your loan structure, whether you’re on a fixed or variable rate and, if your loan is fixed, when the fixed interest rate period will end.

If you’re with ANZ, you can find out the latest information and updates on rates and changes here.

9 ways to help you prepare for your fixed interest rate period ending

The good news: there’s lots of things you can do now to help ensure you’re at the top of your (home loan) game when your fixed interest rate period ends. Here are nine things for you to consider doing:

1. Talk to your bank and find out your options

Unsure when your fixed interest rate period is ending? Or what happens when it does? To get an idea of what’s next for your home loan (and repayments), what options are available to you or if you just want to feel more informed, talk to your bank. In the meantime, here’s a handy calculator to estimate what your future repayments might be. Consider booking in for our home loan check in – it’s free, even if you’re not an ANZ customer. It only takes 15 minutes, requires no prep or paperwork and can help you find ways to fine-tune your home loan so it continues to meet your needs.

2. Consider a split loan and get the best of both worlds

A split loan, as you may have guessed, lets you split your home loan between a fixed and variable rate. It’s kind of like having the best of both worlds – the certainty of a fixed rate as well as the flexibility of a variable loan. This can also help if you have an offset account or want to make additional repayments. You may also consider signing up for another fixed-rate term.

3. Consider an offset account or redraw facility and you could save

Depending on your loan type, having money in an offset account or making extra repayments that are eligible to be accessed as redraw may help you reduce the amount of interest you pay on your home loan. Offset and redraw are not available for all loan types, so check with your lender.

In a nutshell, redraw lets you access any extra payments you’ve made on your eligible loan (eligibility criteria apply).^disclaimerMeanwhile an offset account is a savings account that can be linked to an eligible home or investment loan. The money you have in your offset account is used to ‘offset’ the interest you owe on your linked loan – meaning you’ll only be charged interest on the difference.^disclaimer

4. Change the frequency of your repayments

It may sound simple – but changing your home loan repayments to be fortnightly or weekly (instead of monthly) can actually save you money in the long run. This is because there’s 12 months in a year – but that is made up of 26 fortnights or 52 weeks. So, for example, if you switched from monthly to fortnightly repayments, by the end of the year you’ll have paid the equivalent of an extra month of repayments – which can help you pay off your home loan faster and save on the amount of interest you’re paying.

5. Make your repayments the minimum amount

If you’re paying more than the minimum repayment amount, you might want to consider changing your repayments to the minimum loan amount in order to free up your cash flow.

6. Build a buffer

Having a buffer – aka some extra savings – can help you feel more confident as your fixed rate period end date approaches. Consider prioritising saving a little extra in preparation for your fixed interest rate period ending. There’s more tips on ways to save money here.

7. Consider loan terms when looking for better rates

If you’re looking at a ‘better rate’ with another bank – a helpful tip is to ensure you are comparing apples with apples. For example, if your original loan has a 25-year loan term, and your new loan with a better rate requires you to extend your loan term to 30 years, you may end up paying more interest over the life of the loan.

8. Consider interest only to reduce minimum repayment

If you’re really feeling the pinch, you may like to consider moving to interest only repayments for a period of time. What are they, you ask? Well, interest only repayments mean you only pay off the interest your loan accrues, not the principal (overall) balance. This means your minimum repayment will be lower during the interest only period compared to paying principal and interest. It’s important to note, this means you’re not paying off the loan balance so you may end up paying more interest over the life of the loan. Further, when your interest only period ends, your repayments are likely to be higher, as you’ll need to start paying more in order to pay back the principal balance and interest, within the term initially set for your loan. If you’re considering this option, talk to your lender or learn more here.

9. Consider if another fixed-rate term is for you

With your fixed-rate home loan, you may have liked the certainty of repayments and therefore being able to budget accurately. In this case you may consider signing up for another fixed-rate term.

Where to get help

If you’re an ANZ customer, visit the Manage Your Loan section of our website to find everything you need to manage, update and get the most out of your home loan - including options that could help you stay on top of your repayments and how to get support if you need it.

If you’re struggling to meet your home loan repayments (before or after your fixed interest rate period ends), talk to your bank or loan provider. If you need more information or help from ANZ, visit our page on how to manage your home loan repayments.