As you can imagine, we get this question a lot, and with good reason! With fixed rates the lowest we’ve ever seen, most of our clients chose a fixed rate, and are now facing much higher rates when the term expires.
At Peasy, it’s part of our process to try and soften the landing as much as possible, and we do this by negotiating the rate with your current lender, plus providing you with other lenders’ offers to show you how this compares in the market.
As for what you can expect and when, the time frame looks a little like this;
- 3 months out from expiry – Your bank will contact you to let you know your fixed rate is expiring, and provide you with a standard offer – My advice is to ignore this email, as the offer is almost never pre-negotiated
- 6 weeks out from expiry – We will be in contact with you to let you know we are starting the review process. We may need some updated info from you such as your residential postcode (in case it changed), or a letter to be signed to authorise our review
- 30 days out from expiry – this is when we negotiate the rate. We need to wait until 30 days out because the offers will only last 30 days out. There’s usually a bit of back and forth with negotiating, so it’s pointless starting any earlier than this (some lenders expire after 14 days so we’ll let you know if this is the case)
- Around 3 weeks out from expiry – We should have the offers back at this stage, so we’ll send you a table showing you the discounted variable rate, a fixed rate from the current lender, and potential savings if you were to move to another lender
- The day of expiry – the fixed rate will now move to the variable rate we negotiated for you, and unless you want to refinance or re-fix, there’s nothing for you to do.
If you want to refinance, we’ll send you a checklist for the documents we need and follow a similar process to when you initially applied for your loan. The settlement does not necessarily need to happen before the fixed rate expiry, as your loan will simply roll off onto a variable rate that we negotiated for you.
It’s important to keep in mind that we do not want to start this review process too early. If we switch to a variable rate before the fixed rate is due to expire, you’ll just end up paying a higher rate without any great benefit.
Regardless of whether your loan is fixed or variable, we review all of our loans at least annually, so you can rest assured knowing that your loan will be competitive whilst ever we are looking after it for you.
Our team is here to answer any questions you may have, so if you need anything or have any questions you’d like to ask, please don’t hesitate to reach out.
