As your fixed-rate loan approaches its end, a pivotal juncture emerges on your financial path. The choices you make now may significantly shape your future repayments. Many Aussies are opting for fixed-rate loans, and it is important to understand the implications as the fixed term concludes. This article delves into some of the key decisions you may face as you near the end of your fixed term.¹

Assess your circumstances

Before you make any decisions, take a moment to reflect on the state of your circumstances. Have there been any changes since you initially took on your fixed-rate loan? Life is ever-changing, and factors like income shifts, family growth, or unexpected expenses can reshape your financial landscape. It's crucial to ascertain how these shifts could intersect with your loan strategy.

Be aware of market dynamics

Equipping yourself with knowledge about the broader financial climate is a wise move. The market is a dynamic entity, influenced by various economic variables and policies. Familiarising yourself with the prevailing trends, interest rates, and economic forecasts could empower you to make informed decisions about your loan's trajectory.

Know the details of your loan

Understanding the specifics of your loan is pivotal. Do you have an interest-only loan, or is it structured around both interest and principal? Knowing this distinction is essential, as it dictates how your payments are allocated. 

We recommend seeking independent financial advice tailored to your goals. Some of the options that you may wish to consider include:

• Sticking to the variable rate on your current loan: Opting to remain with the variable rate might offer flexibility in a fluctuating market. Variable rates can adjust in response to economic changes, potentially impacting your repayments.
• Take out another fixed term: Re-entering a fixed-term agreement can provide stability in the face of market uncertainties. 
• Split your loan between fixed and variable: This hybrid approach offers a middle ground. Part of your loan remains fixed, while the other part adapts to market shifts. It's a strategy that seeks to balance predictability with adaptability.

Consider your budget

Before embarking on any financial journey, a well-defined budget is a compass that can guide you toward your goals. Evaluating your expenses, income, and saving potential could be instrumental.

Need a bit of help? Suncorp Bank's Budget Planner calculator could help you to work through your income and expenses to get a better idea of your financial situation.²

For answers to your home finance questions, talk to a Suncorp Bank home loan expert. All consultations are 100% obligation-free.

Talk to a home lending expert

Published 16 November 2023

¹Any information or advice is intended to be of a general nature only and has been prepared without taking into your particular objectives, financial situation or needs. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it. You should make your own enquiries, consider whether advice is appropriate for you and read the relevant Product Information Document before making any decisions about whether to acquire a product.

²The results from Suncorp Bank’s Budget Planner calculator by Widget Works are estimates only and based upon information entered by the user. The results should be used as an indication only. The calculator does not replace personal financial advice and you should seek specific professional advice prior to acting on any information.