Refinancing — switching your home loan from one lender to another — is one of the most powerful financial tools available to Australian mortgage holders. According to the RBA, approximately 20–25% of all home loan balances are refinanced each year. Yet many borrowers delay because the process seems complex. In reality, with the right guidance, refinancing takes four to eight weeks and is managed mostly by your broker and conveyancer.
Steps 1–2: Assess Your Current Position and Compare Your Options
Step 1 — Know your numbers: Before comparing, establish your current position. What is your outstanding loan balance? What is the current interest rate and type (fixed or variable)? When does any fixed period end? What is the property's current approximate value (to estimate your current LVR)? Are there any break costs or exit fees? A 15-minute review of your loan statement and online banking answers most of these questions.
Step 2 — Compare your options properly: Do not simply compare interest rates. Compare the full cost of each loan: interest rate plus annual fees plus offset account fees plus establishment costs at the new lender, weighed against the rate saving and features benefit. A mortgage broker can run this comparison across a full lender panel — covering major banks, second-tier lenders and non-bank lenders — to identify the genuinely best option for your specific loan profile.
Your Current Lender May Match the Best Rate
Before initiating a full refinance, call your current lender and ask for a rate reduction citing the competitive rates you have found elsewhere. Many lenders will negotiate — particularly if you have a strong repayment history and good LVR. If they match or come close, you may avoid the cost and administrative effort of full refinancing. If they do not, proceed with the new lender.
Steps 3–4: Apply for the New Loan and Discharge the Old One
Step 3 — Apply with the new lender: Your broker prepares your application with updated financial documents (recent payslips, bank statements, current loan statements) and submits to the chosen lender. The new lender will: assess your application, order a valuation of your property, and issue a formal approval with loan documents. This typically takes two to four weeks.
Step 4 — Discharge your existing loan: Once the new lender has formally approved and prepared loan documents, your existing lender must be notified of discharge (closure of the current loan). Most lenders require a signed 'discharge authority' form with approximately two weeks notice. Your broker will manage this coordination — ensuring the discharge and new loan settlement occur simultaneously so you are not without a home loan or paying two sets of interest.
Step 5: Settlement and What to Do After
Settlement of a refinance is handled by your conveyancer (or in some cases the new lender's solicitor). On settlement day: the new lender advances funds to pay out the old lender; the mortgage registered by the old lender is discharged from the property's title; the new lender's mortgage is registered; and your loan transfers. You will receive confirmation from your conveyancer, and the new loan begins immediately.
After settlement, update any direct debits linked to the old loan account (for example, if you were automatically crediting your salary to the old offset account). Confirm your new repayment schedule with the new lender. Ensure your offset account is funded if applicable. And set a calendar reminder to review the loan again in 12–18 months — refinancing should be a regular discipline, not a one-time event.
Frequently Asked Questions
About the Author
Sakib Manzoor
Senior Finance Wellness Expert
Sakib Manzoor is the founder of Secure Finance and brings extensive experience in Australian mortgage broking and financial wellness. Specialising in helping clients achieve their property finance goals through personalised strategies and expert guidance, Sakib is FBAA accredited and committed to providing clear, actionable advice. All content is written to meet Australian regulatory standards and is regularly updated to reflect current market conditions.