How To Refinance Your Home Loan

Refinancing a home loan means replacing your existing mortgage with a new one, either with your current lender or by switching to another. Done right, it can cut your repayments, unlock equity for renovations or investments, or help you consolidate debts.

The refinance process involves five key phases: planning your refinance, comparing options, applying, valuation and approval, and finally settlement.

At each phase, the difference between going directly to a bank and working with an expert broker matters. Banks are limited to their own products, but we’re legally required to act in your best interests and have access to a wide panel of lenders. That means you get more choice, fewer surprises, and better long-term outcomes.

How To Refinance Your Home Loan

Refinancing isn’t as complicated as it looks. Think of it as a journey with five key phases, and at each stage, the right expert can save you time, money, and stress.

Phase 1: Plan Your Refinance

Start by being clear about your goals.

Are you hoping to lower your interest rate, reduce repayments, consolidate debts, unlock equity for renovations or even an investment property?

Once you know your “why,” review your current loan and check for any break costs or ongoing fees. At the same time, calculate your home equity since this will affect the deals available.

Phase 2: Compare Your Options

With your goals in mind, weigh up whether the potential savings outweigh the costs of refinancing.

Switching lenders can involve discharge fees, application fees and valuation costs, so it’s important to do the maths. Then compare lenders to see who can offer you a better rate or features.

Phase 3: Get Ready to Apply

Preparation makes the process smoother. This is when you gather your documents, such as payslips, loan statements and identification so that the lender can assess your application quickly.

If you’re using a broker, they’ll package and lodge the application for you, making sure your income, expenses, assets and liabilities are presented clearly to maximise your chance of approval.

Phase 4: Valuation & Approval

Next comes the lender’s due diligence. Depending on the circumstances, they may order a valuation of your property, which can be a desktop assessment or a full inspection.

Once that’s complete, your application will be moved to formal approval. You’ll receive a loan contract setting out your new terms, which you should review carefully before signing. Depending on the lender and your situation, this phase can take anywhere from two to six weeks.

Phase 5: Settlement & New Loan Setup

The final stage is settlement. At this point, your new lender will notify your current lender that you’re refinancing and request a loan discharge. You’ll need to sign a discharge form, which authorises your old lender to release the mortgage. Your current lender then provides a payout figure, which your new lender uses to close out the loan.

Once this is done, your new lender takes over the mortgage. You’ll receive confirmation of your new repayment schedule and can start using features such as offset or redraw if they’re included. From here, you’ll make repayments to your new lender and enjoy the benefits of your refinance.

When Is The Right Time To Refinance?

A general rule of thumb is every 3-4 years. But timing depends on your goals:

• Renovating? You can refinance to release equity to fund upgrades or build a granny flat.
• Managing debt? Consolidate credit cards and personal loans into one repayment
• Investing? Use equity to buy another property.
• Chasing savings? Switch to a sharper rate or take advantage of refinance cashbacks.

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What Not To Do When Refinancing?

• Do not take on new debt before the new loan is approved.
• Do not miss loan repayments, as they will appear on your credit file and impact your credit score.
• Do not focus on the advertised or headline rate only. Look at the comparison rate and the other fees associated with refinancing.

Get Expert Help During The Refinance Process

Refinancing can feel overwhelming, but you don’t need to do it alone. At Home Loan Experts, our mortgage experts will:

• Compare 50+ lenders to find you a better deal
• Check if you qualify for cashback offers
• Handle the paperwork and legwork
• Provide free comparable sales report so you know how much equity you have to refinance
• Work in your best interests so the refinancing benefits you in the long run.