Are You Headed for the Fixed-Rate Cliff? Here’s How to Prepare for a Soft Landing
What Is the Fixed-Rate Cliff?
You may have heard the term “fixed-rate cliff” circulating in finance news, but what does it actually mean?
A staggering 880,000 fixed-rate loans are set to end this year, leaving many Australian households facing significantly higher mortgage repayments.
That’s because variable interest rates now offered by lenders are much higher than the historically low fixed rates locked in during 2020 and 2021.
So, what can you do to reduce the impact and secure a better deal? Let’s dive in.
Why Is the Fixed-Rate Cliff Looming in 2023?
Before 2020, fixed-rate mortgages made up about 20% of all Australian home loans.
But when the Reserve Bank of Australia (RBA) slashed the cash rate to a record-low 0.10%, many Australians jumped at the opportunity to lock in historically low fixed rates for two to three years.
This resulted in fixed-rate borrowing doubling to 40% of all home loans in 2021.
However, in May 2022, the RBA began aggressively hiking interest rates—pushing the official cash rate back up to 3.60%.
Now, 880,000 mortgage holders are set to roll off their fixed-rate loans throughout 2023—facing much higher repayments as a result.
💡 Learn how refinancing could lower your repayments.
How the Fixed-Rate Cliff Could Impact Your Budget
According to CoreLogic data, a mortgage holder with an average loan size of $538,936 and a fixed rate of 1.98% could see their repayments jump by over $1,000 per month when rolling onto a standard variable rate.
🔹 Homeowners who locked in fixed rates around 1.75 – 2.25% in 2020/2021 could soon be facing variable rates of 5 – 6%.
🔹 This increase exceeds the 3 percentage point interest rate buffer lenders use to assess loan serviceability.
💡 Learn more about navigating changing interest rates.
How to Refinance Properly
When your fixed-rate loan expires, lenders often won’t offer their best rates to existing customers—saving the lowest rates for new borrowers instead.
Refinancing with a new lender can help you:
✅ Access lower introductory rates
✅ Reduce monthly repayments
✅ Potentially save thousands over time
That’s where a mortgage broker can help.
💡 Speak to a mortgage broker today to explore better refinancing options.
Why Work With a Mortgage Broker?
Navigating the end of a fixed-rate loan can be stressful, but a broker can help by:
✅ Comparing loan options across a vast lender network
✅ Finding the best rates suited to your needs
✅ Ensuring lenders meet their Best Interests Duty
💡 Unlike banks or digital lenders, brokers won’t push cashback offers that disguise high fees or undesirable loan terms.
Instead, we ensure you get the best deal for your financial situation.
Is Your Fixed-Rate Cliff Approaching? Let’s Find You a Soft Landing
📉 Don’t wait until your loan expires to explore refinancing options!
At CBM Mortgages, we help homeowners:
✅ Compare refinancing loans
✅ Lower repayments & improve loan terms
✅ Explore options like loan extensions or debt consolidation
💡 Contact CBM Mortgages today to start planning your next move and secure a better mortgage deal!
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Written by Craig McDonald 12/06/2025
