Do you know when to switch from fixed to variable?

Your fixed rate period is ending, and the difference between what you're paying now and what the lender wants to roll you onto might be more than $500 a month.

When a fixed rate ends, most lenders will automatically move you to their standard variable rate. That rate is often higher than what new borrowers are offered, and it can include fewer features than you'd get if you actively chose a product. The decision to refinance from fixed to variable is not just about whether variable rates are lower right now. It's about whether your current lender is offering you a competitive deal, whether you need features your fixed loan didn't include, and whether your circumstances have changed enough to justify the effort.

What happens when your fixed rate period ends?

Your lender will move you to their standard variable rate unless you contact them first. That rate is typically higher than the rates advertised to new customers, and it may not include an offset account or redraw facility. You'll receive a letter about 30 days before the fixed period expires, usually with an offer to refix or accept the rollover rate. In our experience, that letter rarely includes the most competitive option available to you, even with your current lender.

Consider a pharmacy manager who fixed at 2.3% three years ago and is now rolling onto a standard variable rate of 6.8%. The monthly repayment on a loan amount of $600,000 would jump from around $2,400 to over $4,000. That difference is immediate and affects household cashflow in the same month the fixed period ends. If you wait until after the rollover happens, you're paying the higher rate while you arrange a refinance.

Should you refinance to variable or negotiate with your current lender?

You should refinance if your current lender's retention offer is more than 0.2% higher than what you could access elsewhere, or if the variable product they're offering lacks features you need. Some lenders will reduce your rate if you call and ask, but the discount they offer is often smaller than what a new lender will provide to win your business. A retention rate might bring you down to 6.5%, while a refinance might land you at 6.1% with an offset account included.

The other factor is loan features. Many fixed rate loans do not allow offset accounts or limit extra repayments. If you've built up savings during your fixed period and want those funds to reduce the interest you're charged, switching to a variable loan with an offset becomes a cashflow decision, not just a rate decision. For pharmacy managers with variable income from overtime or locum work, that flexibility can be more valuable than a 0.1% rate difference.

Can you access equity when you refinance to variable?

You can release equity at the same time you switch from fixed to variable, and doing both in a single refinance application is often more efficient than separating them. This is common when pharmacy managers want to fund an investment property deposit, consolidate other debts, or renovate. The valuation required for a refinance application will determine how much equity is available, and lenders will assess your borrowing capacity based on your current income and commitments.

As an example, a pharmacy manager refinancing a loan of $500,000 on a property now valued at $850,000 has access to around $180,000 in equity at an 80% loan-to-value ratio. If that equity is being used to fund an investment property purchase, the refinance can be structured so the new variable loan includes an offset account, and the investment loan is set up separately. Both applications are processed together, and settlement happens on the same day. If your goal is to expand your property portfolio, refinancing when your fixed rate ends is often the most logical trigger point.

What does the refinance process involve?

The process starts with a loan health check to compare your current loan against what's available. You'll need recent payslips, tax returns if you have other income sources, and a current mortgage statement showing your loan amount and repayment history. The new lender will order a valuation, assess your application, and issue formal approval usually within a week. Once approved, your solicitor or conveyancer will handle settlement, which involves paying out your old loan and registering the new mortgage.

Most refinances settle within four to six weeks of submitting the application. If your fixed rate period ends before settlement, you'll pay the rolled-over variable rate for that short period, but the difference is usually small enough that it doesn't change the outcome. Some lenders will let you lock in a rate at the time of application, so even if settlement is delayed, the rate you were quoted is protected. If you're refinancing within 30 days of your fixed rate expiry, that rate lock can be useful.

Does refinancing to variable always mean lower repayments?

Not always, but it usually means lower repayments than staying on your lender's standard variable rate. Whether refinancing to variable results in lower repayments than your previous fixed rate depends on what you originally fixed at. If you fixed at 2.5% and variable rates are now sitting above 6%, your repayments will increase no matter which lender you choose. The goal is to minimise that increase and gain access to features that improve flexibility.

For pharmacy managers with income that varies month to month, a variable loan with an offset account and no restrictions on extra repayments can reduce the total interest paid over time, even if the rate itself is slightly higher than a fixed option. If your fixed rate is ending and you're weighing up whether to refix or switch to variable, the decision should account for your current cashflow needs, not just the rate comparison.

When is it worth staying with your current lender?

Staying with your current lender makes sense if their retention rate is within 0.1% of the most competitive refinance offer and the product includes the features you need. Some lenders will also waive application or valuation fees for existing customers who switch products internally, which can save $600 to $1,000. If the retention offer includes an offset account and the rate is genuinely competitive, an internal switch avoids the paperwork and time involved in a full refinance.

The risk is that retention offers are often time-limited and may revert to a higher rate after 12 months. If the discount is conditional and the lender can remove it without notice, you're better off refinancing to a product with a transparent rate structure. Ask whether the rate being offered is a discounted variable rate or the lender's standard package rate, and confirm in writing how long that rate applies.

Refinancing from fixed to variable is not something you do just because the fixed period is ending. You do it because the rate or product your lender is offering doesn't match what you could access elsewhere, or because your financial situation has changed and you need features your current loan doesn't provide. Call one of our team or book an appointment at a time that works for you.

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