Short answer: you work out what you owe and what the property's worth, ask your current lender for a better deal, compare that against other lenders, apply, get the property valued, sign the new loan documents and authorise your old lender to discharge the loan. The new lender pays out the old one at settlement. With paperwork ready, it usually takes two to four weeks.

That's the outline. The detail is where refinances stall, so here it is step by step, in the order we'd normally do it. If you're still deciding whether to switch at all, start with when refinancing is actually worth it and come back.

Step 1: Get your current loan details together

Pull your last statement, or log in to your banking app, and write down:

  • The balance on each loan or split.
  • The interest rate on each, and whether it's fixed or variable.
  • If fixed, when the fixed term ends. You'll need a break cost quote if it's not ending soon.
  • Whether any part is interest-only, and when that period ends.
  • Any offset account and roughly what sits in it.
  • What each loan was originally used for. If part of the debt funded an investment, keep it separate when you switch, because mixing it with personal debt can affect what interest is tax deductible.

Step 2: Estimate what the property is worth

Your loan-to-value ratio, or LVR, decides most of what follows. Divide the balance by a realistic value. At 80 per cent or below you have the widest choice of lenders and no lenders mortgage insurance. Above 80 per cent, switching may mean paying LMI again, which usually wipes out any saving on rate.

Recent sales of similar homes on your street are a reasonable starting point. Be a bit conservative: lender valuations tend to come in under what an agent would list it for. Our guide to how much equity you can use shows the calculation.

Step 3: Ask your current lender first

Call and ask for a rate review, and tell them you're looking at refinancing. Lenders often keep a better rate for existing customers who ask, and it costs you nothing. Sometimes the offer is good enough that switching isn't worth the effort. We cover how to frame that call in how to get a lower interest rate.

If they won't move, or what you need is more than a rate cut (cash out, a different structure, an offset), carry on.

Step 4: Compare the whole loan, not just the rate

Look at the full package side by side:

  • The rate, and what it reverts to after any introductory period.
  • Ongoing fees, such as annual package fees.
  • Whether there's a full offset account, and how many you can have.
  • Whether you can split the loan the way you want.
  • Upfront fees: application, valuation, settlement.
  • Any cashback, and the conditions on it. Some have to be repaid if you leave within a set period.

This is the step a broker does for you. We compare the lenders on our panel against your situation, not just the rate sheet, and tell you which ones are likely to approve it before anything is lodged.

Step 5: Apply

A refinance is assessed like any new loan. The lender looks at your income, expenses and debts as they are now, against today's serviceability rules, not the ones that applied when you first borrowed. Expect to provide:

  • ID.
  • Recent payslips, or tax returns and financials if you're self-employed.
  • Statements for your current home loan, usually the last six months, showing repayments made on time.
  • Statements for savings accounts, credit cards and other debts.
  • Rates notice or similar for the property.

Our home loan documents checklist has the full list. Having it ready on day one is the single easiest way to speed things up.

Step 6: Valuation

The new lender orders a valuation, often a desktop one for straightforward properties and a full inspection for anything unusual. If it comes back lower than expected, you have a few options: ask for a review with comparable sales, try a lender that uses a different valuer, or reduce the amount you're borrowing so the LVR still works.

Step 7: Approval, loan documents and the discharge form

Once approved, the new lender sends loan documents to sign. At the same time you sign a discharge authority for your current lender, which tells them to prepare for payout. Get this in early. Old lenders can take a week or more to process it, and this is the most common reason a refinance runs late.

Expect a call from your current lender's retention team at this point. If they offer to match, that's fine to consider, but compare like for like.

Step 8: Settlement

On settlement day the new lender pays out the old loan electronically and the mortgage on your title changes over. You don't need to be there. After it's done:

  • Check the old loan shows a zero balance and is closed.
  • Move any money in the old offset account across. It isn't always moved for you.
  • Redirect your salary, direct debits and bill payments that came from the old accounts.
  • Note when your first repayment is due on the new loan.

How long does refinancing take?

Two to four weeks is typical from a complete application to settlement. It can be quicker with a simple loan and an efficient outgoing lender. It runs longer when income is complex, the valuation needs reviewing, or the discharge is slow. We go through the timings for each stage in how long home loan approval takes.

What refinancing costs

  • Discharge fee from your current lender.
  • Government fees to register the discharge of the old mortgage and register the new one. In NSW these are set by NSW Land Registry Services.
  • New lender fees for application, valuation and settlement, though these are often waived.
  • Break costs if you're leaving a fixed rate early. Get the figure in writing.
  • LMI if your LVR is above 80 per cent.

Add those up and divide by the monthly saving to see how many months it takes to break even. If you'll comfortably hold the loan past that point, the switch probably pays.

Things that slow a refinance down

  • Cash out without a clear purpose. Lenders want to know what extra money is for. A renovation quote or a planned purchase helps; "just in case" can get the amount reduced.
  • Changed income. A new job still in probation, a move to self-employment, or parental leave all need handling carefully.
  • Credit cards and BNPL. Lenders assess cards at the full limit. Cutting limits you don't use can help.
  • Missed repayments. Even one or two in the last six months can change which lenders will look at it.
  • Interest-only ending. Some lenders won't give a new interest-only period on a refinance, so the repayment may jump.

Thinking about refinancing on the North Shore or Northern Beaches?

We do a lot of refinancing for owners in Chatswood, Manly, Frenchs Forest and the suburbs around them. Often it's a loan set up years ago that has drifted well off the pace, or a fixed rate about to roll off. We'll tell you whether switching is worth it, including when it isn't. See how we handle refinancing, get in touch or call 1300 001 755.

Frequently asked questions

How long does it take to refinance a home loan?

Usually two to four weeks from a complete application to settlement. Complex income, a valuation that needs reviewing or a slow discharge from your current lender can push it out.

Can I refinance with my current lender?

Yes. Asking your current lender for a better rate is the simplest option and is worth trying first. Moving to a different product with the same lender can still involve a new application.

How much does it cost to refinance?

Typically a discharge fee from your old lender, government registration fees, and any application or valuation fees at the new lender, which are often waived. Break costs apply if you leave a fixed rate early, and LMI if your LVR is over 80 per cent.

Do I need a valuation to refinance?

Yes. The new lender orders one to confirm the property's value, which sets your loan-to-value ratio. It may be a desktop valuation or a full inspection.

Does refinancing affect my credit score?

A refinance application shows as an enquiry on your credit file. One enquiry is normal. Several in a short space of time can count against you, which is why it's worth knowing where you'll be approved before applying.

Can I refinance if my income has changed?

Often, yes, but you'll be assessed on your current income and today's rules. A drop in income or a recent move to self-employment can limit your options, so it's worth checking before you start.

General information only. It does not take your objectives, financial situation or needs into account, and it is not credit or financial advice. Lender policy, rates and eligibility change regularly and vary between lenders — talk to us about your own circumstances before acting on anything here.