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Navigating the End of your Fixed Rate Period: The Power of Refinancing in a Rising Interest Rate Market


The Australian real estate market has been on a rollercoaster ride over the last 18 months, with interest rates experiencing a significant increase. For homeowners and investors who are approaching the end of their fixed-rate period, this period of rising rates might bring about concerns of repayment shock. However, there’s a financial strategy that can help you weather these changes while potentially saving you money: refinancing your home loan. In this blog, we’ll explore why refinancing is a smart move in the face of increased interest rates and how it can secure you the best deal for your financial future.

Understanding the Changing Landscape

With the Reserve Bank of Australia (RBA) having increased interest rates to combat inflation, many homeowners find themselves facing higher monthly mortgage payments. This can be particularly jarring for those who had been enjoying the predictability of fixed-rate mortgages (some lower than 2% p.a.). As these fixed-rate periods come to an end, borrowers could see their interest rates rise significantly, causing their monthly repayments to soar.

The Repayment Shock Dilemma

Repayment shock refers to the sudden increase in monthly loan repayments that borrowers experience when their fixed-rate period ends, and they transition to a variable interest rate. This can put significant strain on household budgets and long-term financial plans, potentially leading to financial stress. Homeowners need to proactively manage this situation to ensure their financial stability and avoid falling into arrears.

Enter Refinancing: Your Financial Lifeline

Refinancing involves replacing your existing home loan with a new one that has better terms, often including a lower interest rate. In the current scenario of rising interest rates, refinancing can be a powerful tool to counter repayment shock and secure more manageable mortgage payments. Here’s why:

  • Locking in a Favourable Rate: By refinancing, you can secure a new fixed-rate mortgage or even negotiate a competitive variable rate. This stability can shield you from future rate hikes and help you regain control over your budget.
  • Reducing Monthly Repayments: Refinancing might allow you to extend the loan term, spreading out your repayments over a longer period. While this can result in paying more interest over the life of the loan, it can significantly reduce your monthly financial burden in the shorter term.
  • Accessing Better Features: Refinancing provides an opportunity to explore loans with features that align better with your current financial goals.
  • Consolidating Debt: If you have other debts like credit card balances or personal loans, refinancing can enable you to consolidate these into your mortgage. This could lead to lower overall interest payments and simplified financial management (although will likely cost you more over the life of the loan).

Steps to a Successful Refinancing Journey

Engage Stanley Finance to do the following for you:

  • Assess Your Current Situation: We will begin by evaluating your current loan terms, outstanding balance, and the interest rate you’re paying. This will serve as a benchmark when comparing potential new loans.
  • Shop Around: We will research various lenders and their offerings., looking beyond just interest rates; consider fees, loan features, and customer service reputation.
  • Calculate Costs: Refinancing involves costs such as exit fees from your current lender, application fees, and potential legal fees. We will compare these against the potential savings to ensure it’s a financially sound move.
  • Preparation is Key: We will review your Credit Score to ensure it is healthy and gather all necessary documentation to facilitate a smoother application process.

Stanley Finance’s expertise can guide you toward the best refinancing solution for your unique circumstances.


As the Australian interest rate landscape continues to evolve, homeowners and investors must be proactive in safeguarding their financial stability. Refinancing at the end of your fixed rate period is a powerful strategy that can help you avoid repayment shock and secure the best possible deal in a rising interest rate environment. Stanley Finance will take the time to research, plan, and consult your lender options to enable you to navigate these changes with confidence, ensuring that your loan remains a manageable and beneficial aspect of your financial journey.