A roll-to rate, also known as a revert rate, is a variable interest rate that fixed rates roll (or revert) to at the end of the fixed term period or an interest-only period. Your roll-to rate is based on many factors, but it’s typically on par with the standard variable rate at the time of signing your loan document. You can find Tic:Toc's current roll-to rates on our homepage and our home loans page in the 'Legal Things' section (near the bottom). If you're currently on a fixed rate contract, you can check your roll-to-rate by referring to your loan contract. Depending on the cost of funding at the time, you may have a low (or high) roll-to rate.
What happens at the end of my fixed term period?
Depending on your lender, you may receive a reminder closer to the end of your fixed period notifying you of the roll-to rate and the applicable date.
There are a couple of options you may wish to pursue depending on your roll-to date:
You've got a low variable interest rate
Win! When a roll-to variable rate is lower than what is currently available, the world is your oyster - depending on your situation, you could just let it roll to the roll-to rate. Variable rates are variable in nature and likely to move so it’s worth keeping an eye on your rate and shopping around, so you know what's on offer when the time comes to move on.
You've rolled to a high variable interest rate
Oh boy. Hopefully, you knew this was coming before the end of your fixed term period so that you could get a head start on negotiations with your current lender or shopping around for a home loan to suit your needs, otherwise known as refinancing. There are pros and cons so make sure your new home loan meets your requirements.
Perhaps you’re an A-type who likes to know exactly how much to budget for loan repayments, or maybe interest rates are low right now. Either way, fixing will help you secure your interest rate and give you certainty around your repayments.
You’ve come to the end of your fixed rate term and there are a couple of features and add-ons you feel could help make life a bit easier. Need an offset account or redraw facility this time around? Or want to consolidate some debt to free up cash flow? Maybe you just want to make sure you’ve got the hottest rate going? Start researching so you can get onto a better deal as soon as possible.
Home Loan Guide