01 Jun 2021

What Happens to My Interest Rate After My Fixed Rate Expires?

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When your fixed-rate term expires, you are most likely going to be overcharged by your lender. Whether you re-fix your interest rate, switch to a new lender or do nothing, you’ll still probably end up paying a higher interest rate than you need to. Most people don’t feel the need to check their interest rate after their fixed period ends. 


If you don’t check your interest rate, your lender may switch you to a higher interest rate to compensate for other loans and lower interest rates. For example:

  • If you re-fix your loan without checking your interest rate, you probably won’t receive the exact offers that lenders give to new borrowers.
  • If you allow your loan to revert a variable interest rate, you probably won’t get a good discount. 
  • If you don’t do anything, you’ll pay what the bank charges you, which probably won’t be a significantly higher rate, but it will add up over time.


What should you do?

Before your fixed term is set to expire, you should start comparing rates and deals with other lenders. Often, if you switch to a new lender, you can receive better discounts. Most lenders offer their best deals to new customers to improve business. If you start price shopping and rate comparisons before your loan term end, you can approach your current lender with competing offers. In some cases, they will match the offer. If they don’t, as long as you switch after the loan term ends, you won’t be subject to break costs. 


Mortgage House is a non-bank lender whose team of brokers can find you the loans with the best interest rates. Whether you want to refix your interest rate or switch to a variable rate, our team of experts can find the best deal for you. 


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