Refinancing — switching your home loan from one lender to another (or renegotiating with your existing lender) — is one of the most impactful financial decisions a homeowner can make. A 0.50% rate reduction on a $600,000 loan saves approximately $3,000 per year and $90,000 over the loan term. Yet many borrowers delay refinancing because the process seems complex. In reality, most of the work is handled by your broker and the lenders — you just need to provide documents, sign forms, and make a few decisions. This checklist walks you through every step.
Weeks 1–2: Research, Compare, and Decide
Task 1 — Check your current loan details: Log in to your online banking and note your current interest rate, comparison rate, loan balance, remaining term, any offset account balances, and your loan type (variable, fixed, split). If you are on a fixed rate, note the fixed period end date — refinancing during a fixed period may trigger break costs.
Task 2 — Estimate your property value: Use recent comparable sales in your area (from realestate.com.au or domain.com.au), the bank's online property estimator, or your most recent rates notice to estimate your property's current value. This determines your LVR — and therefore your product options and potential rate.
Task 3 — Calculate your current LVR: Loan balance ÷ estimated property value × 100 = LVR. If your LVR is below 80%, you avoid LMI and access the best rates. If above 80%, LMI will be required on the new loan (some lenders waive this for refinances with a clean repayment history).
Task 4 — Compare rates and products: Use comparison websites, contact your broker, or call lenders directly. Focus on: the interest rate, comparison rate, fees (application, ongoing, discharge), loan features (offset, redraw, extra repayments), and any cashback or incentive offers. Compare the total cost over 3–5 years — not just the headline rate.
Task 5 — Decide: refinance externally, negotiate with your current lender, or both: Many borrowers use competing offers as leverage to negotiate with their existing lender (see our rate negotiation guide). If your lender can match or come within 0.10% of the best available rate, staying may be simpler. If the gap is larger, proceed with an external refinance.
Task 6 — Choose a lender and notify your broker: If using a broker (recommended), provide them with your current loan details, estimated property value, and your goals (lower rate, cash out equity, better features). They will recommend products and handle the application.
Compare Over 3–5 Years, Not Just Year One
Some lenders offer very low introductory rates that revert to higher standard rates after 1–2 years. Always compare the total cost over 3–5 years (including fees, the revert rate, and any cashback) — not just the year one rate. A product with a slightly higher initial rate but lower ongoing rate may save more overall.
- ✓Note your current rate, balance, LVR, loan type, and offset balance
- ✓Estimate your property value using comparable sales or online tools
- ✓Calculate your LVR (loan balance ÷ property value × 100)
- ✓Compare rates, fees, features, and cashback offers across 5+ lenders
- ✓Decide: negotiate with current lender, refinance, or both
- ✓Engage a broker if not already working with one
Weeks 3–4: Application, Documentation, and Approval
Task 7 — Gather your documents: The new lender will require:
Identification: Driver's licence, passport, Medicare card.
Income evidence: Two recent payslips (PAYG) or two years of tax returns and financials (self-employed). Employment letter confirming tenure, role, and salary.
Expenses: Most lenders will review three months of personal bank statements and credit card statements. Some use the Household Expenditure Measure (HEM) as a benchmark.
Existing debts: Current home loan statement (showing balance, rate, and account details), credit card statements, personal loan statements, HECS-HELP balance.
Property details: Current property address, estimated value, and your council rates notice.
Task 8 — Submit the application: Your broker submits the application with all supporting documents to the new lender. The lender assesses your income, expenses, credit history, and the property value. This typically takes 3–7 business days for initial assessment.
Task 9 — Property valuation: The new lender commissions a valuation of your property — desktop, AVM, or full physical inspection depending on the loan amount, LVR, and property type. If the valuation supports the estimated value, the loan moves to formal approval. If the valuation is lower than expected, your LVR may be higher and product options may change.
Task 10 — Formal approval and loan contract: Once all assessments are complete, the new lender issues formal (unconditional) approval and sends you the loan contract. Review the contract carefully (see our loan contract guide), sign it, and return it to the lender.
Task 11 — Notify your existing lender: Once you have formal approval from the new lender, contact your existing lender to request a discharge of your current mortgage. The discharge process takes 10–21 business days depending on the lender. Your broker or conveyancer can handle this on your behalf.
Common delay: The most common cause of refinancing delays is the existing lender's discharge processing time. Some lenders are notoriously slow (15–21 business days). Your broker should factor this into the timeline and follow up proactively.
- ✓Gather: ID, payslips/tax returns, bank statements, loan statements
- ✓Provide: property address, estimated value, rates notice
- ✓Broker submits application to new lender (3–7 days for assessment)
- ✓Lender commissions property valuation (3–7 days)
- ✓Formal approval issued and loan contract sent for signing
- ✓Request discharge from existing lender (10–21 business days)
- ✓Review and sign the new loan contract
Weeks 5–8: Settlement, Switchover, and Post-Settlement Tasks
Task 12 — Settlement booking: Once the new lender has a signed contract and the existing lender has processed the discharge, a settlement date is booked. Settlement is the day the new lender pays out the existing loan and the new mortgage is registered on the property title. Settlement is typically handled electronically (PEXA) and you do not need to attend.
Task 13 — Settlement day: On settlement day, the new lender transfers the payout amount to the existing lender, the existing mortgage is discharged (removed from the property title), the new mortgage is registered, and your new loan is activated. Your offset account (if applicable) is set up, and your new repayment schedule begins. If you are accessing equity as part of the refinance, the additional funds are deposited into your nominated account.
Task 14 — Post-settlement checklist:
Set up direct debits: Arrange automatic repayments from your bank account or the new offset account. Choose your preferred frequency (weekly, fortnightly, or monthly).
Transfer offset funds: If you had funds in an offset account with your old lender, transfer them to the new offset account immediately — every day they sit in a non-offset account is a day you are paying unnecessary interest.
Update insurance: Notify your building insurance provider of the new lender details — the new lender must be listed as an interested party on the policy.
Close old accounts: Once the existing loan is fully discharged and any offset/transaction accounts are no longer needed, close them with the old lender to avoid ongoing fees.
File your loan documents: Keep a copy of the new loan contract, the discharge confirmation from the old lender, and the settlement statement for your records (and for tax purposes if the property is an investment).
Monitor your first repayment: Confirm the first repayment amount and date match the loan contract terms. Check that the interest rate applied matches the approved rate.
Total timeline: From initial research to settlement, a straightforward refinance typically takes 4–8 weeks. Complex cases (self-employed, multiple properties, high LVR) may take 6–12 weeks.
Transfer Your Offset Balance Immediately After Settlement
Every day your offset funds sit in a non-offset account, you are paying full interest on the entire loan balance. If you have $80,000 in offset and your loan rate is 6.5%, one month of delay costs approximately $433 in additional interest. Transfer funds on settlement day or the next business day.
| Week | Key Tasks | Responsible Party |
|---|---|---|
| Week 1–2 | Research rates, compare products, decide | You + Broker |
| Week 2–3 | Gather documents, submit application | You + Broker |
| Week 3–4 | Valuation, assessment, formal approval | New Lender |
| Week 3–5 | Request discharge from existing lender | Broker/Conveyancer |
| Week 5–8 | Settlement, switchover, post-settlement tasks | All parties |
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.