Coming off a fixed rate in 2026: what to do first

19 October 2026 7 minute read Alen Slewa

The Reserve Bank cut three times in 2025, taking the cash rate down to 3.60% in August. It has since raised four times, reaching 4.60% on 29 September 2026. That is the highest the cash rate has been since November 2011.

If you fixed your loan during the cutting cycle, you fixed at the bottom. That was good luck, and it is about to end.

Find two numbers before you do anything else

Most people I speak to about an expiring fixed rate know neither of these, and both are decisive.

The exact expiry date

Not the month. The date. Your lender will roll you over automatically on that day whether you have made a decision or not.

The revert rate

This is the rate your loan lands on when the fixed term ends, and it is almost never the lender’s good rate. It is typically the standard variable rate, which can sit a full percentage point or more above what the same lender would offer a new customer walking in the door.

That gap is the single most avoidable cost in this whole process. Doing nothing is a decision, and it is usually the expensive one.

Both numbers are in your loan contract, and if you cannot find them, a phone call to your lender will produce them.

Your position may have improved even as rates rose

This is worth checking before you assume the news is all bad.

Lenders price loans in bands based on how much you owe against what the property is worth. If you have been paying the loan down for three years, and the property has appreciated, you may have crossed into a better pricing band without noticing.

A borrower who started at 90% of the property’s value and is now at 70% is a different proposition to the lender than they were when they signed. That can be worth more than the difference between two lenders’ advertised rates.

Breaking a fixed loan early may cost less than you think

Here is something counter-intuitive about the current environment.

Break costs exist to compensate a lender for losing money when you exit a fixed loan early. That loss happens when wholesale rates have fallen since you fixed — the lender has to re-lend your money at a lower return than it promised you.

When rates have risen since you fixed, that loss largely disappears. The lender can re-lend at a higher rate than your contract pays it.

So if you fixed in 2024 or early 2025 and you are weighing up whether to wait out the term, it is worth asking your lender for an actual break cost figure rather than assuming it is prohibitive. It is often far smaller than people expect, and occasionally nil.

I would not break a fixed loan on principle. But the number is free to obtain and it sometimes changes the answer.

Should you fix again?

Fixed rates repriced upward well before the Reserve Bank moved. Early in 2026, dozens of lenders lifted their fixed rates, with some three-year products rising by as much as 0.7 of a percentage point — and that was ahead of the four rises that followed.

That is the market pricing in the rises it expects. Which leads to the point most people miss when they ask me whether to fix.

Fixing is not a bet you can win. By the time you can see a rise coming, the fixed rate on offer already includes it. The lenders employ people whose entire job is to price that risk, and they are not offering you a rate that loses them money.

So the right question is not “are rates going up?” It is “what happens to my household if they do?”

If a one-point rise would be uncomfortable but survivable, variable is usually the better value, because you are not paying a premium for certainty you do not need. If a one-point rise would genuinely hurt — a single income, a tight budget, a business in a soft patch — then fixing is worth paying for, and the premium is the point rather than the problem.

That is a question about your circumstances, not about forecasting.

The split nobody mentions

You do not have to choose. Most lenders will let you fix part of the loan and leave the rest variable.

A split gives you a predictable floor under your repayments on the fixed portion, while the variable portion keeps the things a fixed loan usually takes away: an offset account, unlimited extra repayments, and the ability to refinance without a break cost.

For people who want certainty but also have lumpy income — which includes a lot of the self-employed clients I work with — this is often the structure that actually fits.

Refinancing is not automatic, so check early

One honest warning. Moving lenders means qualifying again, from scratch.

Regulated lenders must assess you at a rate at least three percentage points above the rate on the loan. With the cash rate at 4.60%, that means being tested somewhere in the eights or nines. APRA has reviewed that three-point requirement and left it in place.

If your income has dropped, your commitments have grown, or you have added a car loan or a business facility since you first borrowed, it is possible to be sitting on a good rate you qualified for three years ago and not qualify to move to a better one now.

That is not a reason to avoid looking. It is a reason to look early, while there is still time to do something about it — clear a small debt, close an unused credit card, wait for a stronger tax year.

A workable timeline

If your fixed term ends in the next six months:

1. Three months out. Get your expiry date and revert rate in writing. Work out your current loan-to-value position.
2. Two months out. Have your options assessed — your existing lender’s retention offer, and what the rest of the market would do for you. Both, not one.
3. Six weeks out. Decide the structure: fixed, variable, or a split, and whether you need an offset. The structure matters more than the last 0.05% on the rate.
4. One month out. Have it in motion. A refinance takes weeks, not days, and you do not want the expiry date to arrive mid-application.

Two dates worth watching

September-quarter inflation figures land on 28 October 2026, and the Reserve Bank’s next decision follows on 3 November 2026. The major banks are split on the outcome — most expect a hold at 4.60%, at least one expects another rise.

Neither date changes the advice above. Both will move the rates on offer, which is a reason to have your position understood before they land rather than after.

If your fixed term ends in the next six months, that is the right time to have this conversation. Get in touch and we will work out where you actually stand.