Reaching the end of a fixed-rate term on your home loan can be a crucial time for homeowners. Here's a guide on what to do as your fixed rate comes to an end and how soon you can start looking at new fixed rates. We'll also touch on the current interest rate trends as of Mid 2024.
Understanding the Current Market
Currently, interest rates are trending slightly downward, which is great news for those nearing the end of their fixed-rate term. In this scenario, it might be beneficial to wait until closer to the end of your current term before locking in a new rate.
Timing Your Refix
Most banks allow you to lock in a new fixed rate between one and a half to two months before your current rate expires. For example, if your fixed rate ends on June 1, you can expect to receive new rate offers from your bank around early to mid-April. In a rising rate environment, securing a new rate quickly might be wise. However, with rates currently decreasing, waiting until the last moment could be more advantageous.
Early Communication and Planning
It's a good practice to start considering your options about two and a half months before your fixed rate term ends. This early preparation ensures that you're aware of all available options and can make an informed decision. At My Mortgage, we reach out to clients around 60 days before their refix date to make sure we have time to have the conversations needed. During this time, you can discuss the best rates, the optimal loan structure, and whether you're with the most suitable bank for your needs.
Refixing Online
Nowadays, most banks prefer that you refix your mortgage online. You'll be given new rates, which you can review and select the best option. You can choose to refix your mortgage as close as the day before or even the day your current fixed rate ends. The process is seamless and can be completed through your online banking.
Considering Other Banks
It's also important to explore whether other banks might offer better options. Starting discussions early allows time to arrange a refinance to a new bank if it offers better rates or products. This way, you can switch banks smoothly and benefit from improved terms as soon as your fixed rate term ends.
Personalized Advice is Key
While general advice from online groups, neighbors, or economists can be helpful, it’s crucial to get personalized advice tailored to your specific situation. Factors such as your family circumstances, work situation, future plans, and financial goals should all be considered when choosing the right fixed term and interest rate.
Get in Touch
If you have any questions about fixed rates or need advice on your mortgage options, the team at My Mortgage can help you make the best decision for your unique situation. You can book a time with them below.
By following these guidelines, you can navigate the end of your fixed-rate term with confidence and make informed decisions about your mortgage.