The Fixed Rate Cliff: Should You Refinance Now?

If you locked in a fixed rate between 2021-2023, you likely secured a rate under 3%. Now, as those fixed periods end, you're facing the "fixed rate cliff."

Understanding the Cliff

Here's what typically happens:

• Your fixed rate ends (e.g., 2.5%)
• You automatically roll onto your lender's standard variable rate (often 7%+)
• Your repayments can jump by $1,000+ per month

Real Example

Client scenario we helped recently:

• Loan amount: $550,000
• Fixed rate (ending): 2.49%
• Lender's variable rate: 7.24%
• Monthly increase: $1,380 (from $2,170 to $3,550)

Your Options

1. Stay and negotiate: Call your bank and ask for a better rate. They often have retention offers.
2. Refinance to a new lender: We're seeing rates from 5.69% with cash back offers up to $4,000.
3. Fix again: Current 2-3 year fixed rates are around 5.3-5.5%.

When to Start

Don't wait until your fixed rate ends. Start the process 2-3 months before:

• Refinancing takes 4-8 weeks
• You can lock in rates now for settlement later
• Avoid even one month on the higher variable rate

Fixed rate ending soon? Let us compare your options. Our service is free.