Fixed Rate Cliff 2.0: Borrowers Rolling Off 2023 Fixed Loans
ADS Team
Author
August 26, 2026
15 days ago
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In short: Borrowers who fixed in 2023 are now rolling onto variable rates substantially higher than the rate they left. Unlike the first fixed-rate cliff, this cohort reverts into a higher-rate environment after three years of cost-of-living pressure - so the step up lands on budgets with less slack.
Key takeaways
- Reversion is to the lender's variable rate, often above new-customer pricing.
- The jump arrives in one step, not gradually.
- Start shopping eight weeks before the fixed term ends.
- Break costs are usually minimal when rates have risen.
The size of the step
A borrower who fixed $600,000 at 5.5% and reverts to 6.9%:
| Rate | Monthly | |
|---|---|---|
| Fixed | 5.5% | $3,407 |
| Revert | 6.9% | $3,952 |
| Increase | +$545 |
What to do, and when
- Eight weeks out - find your reversion date and the rate you will revert to.
- Six weeks out - get quotes from other lenders and ask your own for a reprice.
- Four weeks out - lodge an application if switching; refinances take 2-6 weeks.
- Before reversion - decide fixed, variable or split.
The default outcome for borrowers who do nothing is the revert rate, which is frequently well above what the same lender offers new customers.
Break costs are probably not the obstacle
Break costs arise when wholesale rates have fallen since you fixed. Rates have risen since 2023, so exiting early now typically costs little or nothing beyond an administrative fee.
Ask for a break cost quote in writing - it may free you to act before the reversion date rather than waiting for it.
Frequently asked questions
Can I refinance before my fixed term ends?
Yes, subject to break costs - which in a rising-rate environment are often minimal. Get a written quote before assuming you are locked in.
Should I fix again?
Fixed rates price off swap markets that already embed expectations. Fix if repayment certainty has value to you; a split is often the practical middle ground.
What if I cannot afford the revert rate?
Contact your lender before the reversion date. Options include repricing, extending the term, or a hardship variation - all easier to arrange before arrears than after.
Related reading
- Break Costs on Fixed Loans: How They Are Calculated
- Refinancing Your Home Loan: The Complete 2026 Process
- Fixed vs Variable in a Hiking Cycle: The 2026 Decision Framework
Sources
- Housing lending rates, statistical table F6 — Reserve Bank of Australia
- Financial Stability Review — Reserve Bank of Australia
Rates checked as at 2 September 2026. Interest rates, lender policies and government schemes change frequently. Figures in this article are illustrative and were accurate at the date shown.
General advice warning: This article contains general information only. It does not take into account your objectives, financial situation or needs, and it is not personal credit or financial advice. Consider whether it is appropriate for you and seek advice from a licensed credit representative before acting.
Any interest rate shown is an example only and is not an offer of credit. Where a rate is quoted, the applicable comparison rate is available from the relevant lender and should be considered alongside it.
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