Why It's Important to Plan Ahead?

Coming off a fixed-rate mortgage can be a significant financial event, and it’s crucial to plan ahead to avoid any surprises or disruptions to your household finances.

Here’s a step-by-step guide to help you navigate the process of coming off your fixed-rate mortgage in South Australia:

Step 1: Understand the impact of the rate change

Before your fixed-rate ends, it’s crucial to understand the potential impact of the interest rate change on your monthly repayments. The Reserve Bank of Australia (RBA) has been increasing interest rates in an effort to curb inflation. As a result, variable interest rates have also been rising, which will likely affect your repayments when you transition from a fixed-rate loan.

Step 2: Contact your current lender

Once you have a clear understanding of the potential impact of the rate change, it’s time to contact your current lender. They should be able to provide you with an updated interest rate and an estimate of your new monthly repayments. It’s also a good idea to inquire about any break costs or fees associated with switching to a variable-rate loan. For help with this process, reach out to our expert team. We can contact your lender for you and potentially negotiate a lower rate. 

Step 3: Shop around for competitive rates

Don’t just settle for your current lender’s offer. Take the time to shop around and compare variable interest rates from different lenders in South Australia. You might be surprised to find that there are better deals available. At Parrington Finance, we have access to over 45 lenders across Australia, partially in SA and NT. Having access to these lenders means access to multiple different offers and interest rates that could work for you and your situation. Reach out and let us do the shopping for you. 

Step 4: Consider refinancing

Refinancing your mortgage to a new lender with a more competitive variable or fixed-rate loan could save you money in the long run. However, it’s important to consider any break costs or fees associated with refinancing, as these could offset some of the potential savings. Our team will make sure that this process is clear to you and help guide and inform your decision making. 

Step 5: Make a decision and notify your lender

Once we’ve done our research and compared rates, it’s time to make a decision about your mortgage. If you’re staying with your current lender, we’ll notify them of your decision and confirm the new interest rate and repayment terms. If you’re refinancing, choose your new lender and follow their instructions for the refinancing process.

Step 6: Prepare for higher repayments

As mentioned earlier, variable (and fixed) interest rates are currently increasing, so be prepared for your monthly repayments to rise. Adjust your budget accordingly to accommodate the higher payments and avoid financial strain.

Additional tips:

Start planning early: The sooner you start planning, the better prepared you’ll be for the transition from a fixed-rate to a variable-rate loan.

Seek professional advice: If you’re feeling overwhelmed or unsure about your options, consider consulting our team at Parrington Finance. We can provide personalised guidance and help you make informed decisions.

Review your budget: Take a close look at your budget and identify areas where you can cut back on expenses to offset the increase in your mortgage repayments.

Consider additional repayments: If your financial situation allows, consider making additional repayments on your mortgage to reduce the principal and shorten the loan term. This can save you money on interest in the long run.

Don’t let the end of your fixed-rate mortgage leave you feeling uncertain. Contact Parrington Finance today to speak with one of our experienced mortgage brokers. We’ll help you navigate the process, compare rates, and find a competitive mortgage solution for your circumstances. Book a call today and take control of your financial future.