Fixed rate revert to Variable rate

HOW DOES IT WORK?

Navigating the End of Your Fixed-Rate Term with Clear Pacific Capital:

As your fixed-rate term concludes, it’s crucial to understand the potential financial shifts and explore your options:

1. Revert Rate Realization:

   • If you don’t refix, your bank may impose a revert rate, typically higher than your fixed rate.
   • Refixing might not come with the special offers extended to new fixed-rate borrowers.
   • Refinancing offers a chance to secure a better deal by scouting for lower interest rates.

2. Anticipating Repayment Changes:

   • A table comparing fixed-rate loans from December 2021 to March 2023 reveals significant increases in repayment amounts.
   • Predictions of further interest rate rises suggest potential additional hikes when refixing or transitioning to a variable rate.

3. Choosing Wisely:

   • Lenders inform you in advance of the fixed-rate term’s end, providing an opportunity to reassess and seek expert guidance.
   • Consider options like refixing, refinancing, transitioning to a variable rate, or opting for a split-rate loan.

Exploring Refixing:

• Committing to a new fixed-rate term can be a viable option.
• Example: Debra refixed her loan for a year, securing a discounted rate of 2.54% after a rate review, saving thousands.

Considerations Amidst Rising Interest Rates:

• Refixing during rising rates might lead to higher repayments.
• Seeking advice from a mortgage broker becomes crucial for navigating options effectively.

Refinancing Dynamics:

• Changing your existing home loan for one with better rates or features is an option.
• Evaluate cost-benefit factors, including exit fees, and weigh the benefits of lower interest rates against cashback offers.

Variable Rates and Split Loans:

• Automatically switching to your lender’s standard variable rate post-fixed term may lack competitiveness.
• Splitting a loan offers stability through a fixed rate and flexibility with a variable rate, catering to diverse preferences.

Additional Tips:

• Negotiate with your lender for better rates to avoid overpaying.
• Explore offset accounts, especially if transitioning to a variable or split-rate loan.
• Consulting a mortgage broker opens avenues for better deals and wider market exploration.
• Tailor your choice based on future plans; for instance, consider not fixing if you plan to sell your property or make significant extra repayments.

Clear Pacific Capital’s Approach:

• Proactive engagement with clients two months before fixed-rate expiry.
• Education on variable rates, refixing, and refinancing options.
• Encouragement to explore competitive rates from different lenders.
• Post-settlement team negotiation for the best rates based on client decisions.

In conclusion, making informed decisions tailored to your circumstances is vital. Seek expert advice, explore options, and choose the path that aligns with your financial goals. Clear Pacific Capital is ready to assist with over 120 clients already benefiting from their tailored approach since November 2022. Reach out for personalized guidance.