Refinancing your home loan involves more steps than most people expect. Follow this checklist to ensure nothing falls through the cracks between deciding to switch and the new loan settling.
Before approaching new lenders, document exactly what you have. Check your current interest rate (not the original rate — the rate you are actually paying today), whether you are on a fixed or variable rate, when any fixed period expires, your outstanding loan balance, your current LVR, any fees associated with exiting the loan, and any features (offset, redraw) you want to preserve.
If you are on a fixed rate, request a break cost estimate from your current lender before going any further. Break costs can make refinancing uneconomical even if the new rate is significantly lower. Get the figure in writing and understand how it changes over the remaining fixed term.
Get an estimate of your current property value (an online estimate from CoreLogic, Domain, or realestate.com.au is a starting point — the lender will commission a formal valuation). Calculate your LVR: outstanding loan ÷ current property value. If LVR is above 80%, check whether LMI will apply on refinancing.
Use a mortgage comparison service or broker to compare rates across multiple lenders. Look at the comparison rate (not just the headline rate), check what features each loan includes, and verify the revert rate for any fixed rate options. Get at least three to five offers to ensure you are seeing the full market range.
Submit your pre-approval application with the new lender. Documents typically required: last 3 months payslips, latest tax return or group certificate, 6 months bank statements, current loan statements, proof of identity. The lender will run a credit check — this is a hard enquiry.
Once your application progresses, the new lender will commission a formal valuation. This valuation determines whether the LVR is what you estimated and whether LMI applies. If the valuation comes in below your expectation, your LVR may be higher than planned — be prepared for this possibility.
Read your loan offer carefully. Verify the interest rate, comparison rate, all fees, the loan term, offset/redraw features, any rate lock conditions, and the early repayment terms. Do not sign until you have reviewed and understood every condition.
Once you have accepted the new lender's offer, notify your current lender that you are refinancing and intend to discharge the mortgage. They will provide a discharge authority form. Complete and return this promptly — lender discharge processing times vary from a few days to several weeks, and delays can push out your refinance settlement date.
Retention teams: When you notify your current lender, they may transfer you to a "retention team" that will offer to match or beat competing rates to keep your business. This is legitimate and worth exploring — you may be able to get a better rate without the cost and effort of switching.
Your new lender's solicitors and your current lender's solicitors coordinate the simultaneous registration of the new mortgage and discharge of the old. Your conveyancer (if you have engaged one) or the new lender's solicitors manage this. Confirm the settlement date and ensure all parties have the same date.
After settlement, confirm the new loan is active, the old loan is fully discharged, and your repayment is correctly set up via direct debit at the correct amount and frequency. If you are consolidating debts or restructuring, verify all balances are correct. Update any financial software or spreadsheets tracking your loan.
All costs involved in switching lenders and how to calculate break-even.
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