How to navigate the end of your fixed rate mortgage


You're in a fixed-rate mortgage. Finances are tight. Your fixed rate period is coming to an end. You've got a letter from your bank telling you that once the fixed rate ends, your payments are going to increase, by a lot.

What steps should you take to navigate the impending changes?

It's easy to say 'don't panic', especially when you're wondering how you can make ends meet; but do try very hard not to panic.

what to do when your fixed rate mortgage ends

And don't beat yourself up. In the current inflationary environment, many people are dealing with increased mortgage or rental payments, alongside escalating everyday expenses. You shouldn't feel ashamed to be in this situation, nor afraid to do something about it.

In fact, there are plenty of practical things you can do to deal with this situation. These suggestions are not about offering you a magical fix or instantly solving things for you, but it is about exploring options that may make life a little easier for you.

Here are some things you can do.

Contact your lender

Explain your situation and ask what options they have available to you.

There may be options that you haven't considered. For example, your lender may be able to look at changes to the loan term or interest rate options. Your lender is as much invested in doing what they can to keep you as a customer, as you are invested in remaining a customer.

However, be mindful that your lender will need to be confident in your ability to continue to make payments.

One of the terms they may use will be 'serviceability' - and how this is determined is not as simple as looking at your current circumstances and whether you can make payments - but also factoring in whether you have the ability to withstand further changes.

This is what is sometimes called the 'serviceability buffer' and means asking how you would go if, for instance, the interest rates were to continue to increase.

Try a new lender

If you have contacted your lender, and there aren't realistic options available, you can reach out to other lenders to seek a refinance.

You might be worried whether other lenders will touch you if you're in a tough financial situation. Even if your financial situation isn't great, lenders can still lend to you if you can prove you can repay, and the loan payments put you in a better situation than you are now.

Again, new lenders will be making a serviceability assessment - but the loan conditions provided by different lenders may make it easier to satisfy these assessments.

Do a budget

MoneySmart's budget planner is a good place to start to see if you can nut out any obvious costs you can cut.

Budgeting can feel a bit daunting but getting on top of how your money is being spent can ultimately give you a better sense of control of your situation.

Check your credit health

Get a free copy of your credit report, understand what information is on there (because this information will be used by lenders to help determine your position), and check that information is correct.

Websites like Creditsmart have a huge number of resources which help de-mystify credit reporting, including simple explanations of what information is contained in a credit report, and also links to information on how you can get free copies of your credit reports from each of the credit reporting bodies.

Reach out to a financial counsellor

If you are struggling to get on top of your situation, and need some independent advice, reach out to a free financial counsellor.

They can offer advice and also put you in touch with different services that can help. As a first step consider calling the National Debt Helpline on 1800 007 007 or

Be realistic with yourself

If the sums are not adding up and you can't continue with your existing lender or find a new lender to refinance, maybe it is time to think carefully about whether you need to sell your house and look to downsize.

This is a tough decision and one that you don't want to rush into; no one wants to lose the roof over their heads. If this is where you're at, keep talking to your lender.

Tell them what you want to achieve and see if they can work with you to make this whole process less horrible than it needs to be.

Be kind to yourself

Financial stress can have a huge impact on your mental health and wellbeing.

And when your mental health suffers, it can make it so much harder to reach out and actively seek help.

As much as you need to reach out to lenders or financial counsellors for help with your finances, it is equally important to reach out for help for your mental health. Lifeline 13 11 44 or Beyond Blue 1300 22 4636 provide 24-hour support and can also help you navigate how to find ongoing mental health support.

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Elsa is the CEO of the Australian Retail Credit Association (ARCA). Appointed to this role in August 2022, she was previously the regulatory executive director, and has played a pivotal role in the initial drafting and ongoing variations to the Credit Reporting Code, the development of an industry code for data exchange and the review and operation of the Australian Credit Reporting Data Standard. Previously, Elsa worked at the Financial Ombudsman Service and, prior to that, worked in private practice as a legal practitioner focusing on general and civil litigation. She holds a Bachelor of Arts and a Bachelor of Laws from the University of Queensland.