burger-menu icon close-icon

How long does refinancing take?

image for How long does refinancing take?

If you’re looking to refinance your home loan to take advantage of benefits like lower interest rates, added features, or to access home equity, you may be wondering how long would the process take.

We explore the step by step process of refinancing, the average time frame you can expect, and the documents you’ll need handy when you decide to refinance your home loan.

How long does it take to refinance a home loan?

On average, you can expect the entire refinancing process to take anywhere from 3 days to 6 weeks depending on the lender and the complexity of the loan.

For instance, some lenders may take longer to examine all your documents and paperwork, than other lenders would prior to making a decision.

If you’re wondering whether there is anything you can do to speed up the process, here are a few options:

  • Upload your documents as soon as possible
  • Provide enough information so your application is thorough
  • Ensure your application is strong e.g. maintain a good credit score

In other cases, some lenders may offer you a fast refi ; this process speeds up the time it takes to refinance your home loan by using insurance to allow lenders to payout your loan without having the hassle of waiting for your existing lender to action the discharge.

With the loans.com.au FastTrack Refi system, we pay off your old loan before sending any paperwork to discharge the loan. This means you start saving on interest and repayments almost instantly. From the time you return your completed mortgage documents and Loan Agreement to us, it only takes days to switch.

What is the refinancing process?

The refinancing process works in a similar way as applying for your original loan which is why it generally takes up to 6 weeks.

Step 1: Review your current situation

Analyse why you want to refinance and ultimately whether it’s your best option. This will help you and your home loan lender narrow down which loan type and interest rate will suit you.

You also want to understand your current financial situation and how refinancing will help you in the long term. Review your current interest rate and the time you have remaining on your current loan versus fixed and variable rate options on the market to work out how different your repayments will be.

Step 2: Compare home loan options

If you’re thinking about staying with your existing lender, talk to them about other available loan products that may suit you. By having a chat with them, they may be able to offer you a better deal and ultimately save you the stress of switching lenders.

Or if you’re looking at switching, do some extensive research to see which lenders are offering competitive rates, who has useful features, and how their refinancing process works.

You may also want to look into any upfront costs that may be associated with refinancing.

Step 3: Apply for the new loan

If you’re happy with the new loan you’ve chosen, the next step will be applying which works similarly to your original loan application.

Make sure you have all the relevant documents on hand such as payslips, three months of bank statements, rental income evidence, ID, any loan statements, a copy of your rates notice, and six months of your current home loan statements.

Step 4: Property valuation

Your new lender may require a property valuation of your home. Property valuation is used to calculate a borrowers LVR. Where LVR is above 80%, Lenders Mortgage Insurance (LMI) is required. Your lender will generally be looking out to see if your property has increased or decreased in value which can effect your equity.

Step 5: Approval and settlement

Once you’ve been given the ‘A-Okay’ i.e. your lender has inspected your paperwork and deemed your credit history as satisfactory, your loan will be approved.

Generally, a fast refi will see you progress to this final stage within 72 hours while the standard process time could take approximately 2 weeks.

Once you’ve received your approval, you will get your settlement date where your lender will arrange to pay off your existing loan. As soon as this goes through, you will officially begin making loan repayments to your new home loan lender.

When should you consider refinancing?

More often than not, people chose to refinance to secure better interest rates, receive additional features such as offset sub-accounts, switch loan types, and many others.

Circumstances in people’s personal lives such as a new job, kids, and financial setbacks are many other reasons people decide to refinance their home loan.

Before you decide whether you want to refinance or not, consider whether the long term savings you’ll gain will outweigh the upfront costs. This can include break fees, application fees, property evaluation fees, LMI fees, and more.

For those that are thinking of renovating or selling their home sometime in the near future, refinancing may not be the right choice for you.

If refinancing your home loan is on your mind, make sure to weigh up all your options and form a decision that fits your needs and circumstances.

You can use our refinancing calculator to see how much money you could saving on interest and mortgage repayments.

Refinance calculator

The documents/paperwork you need to refinance

To ensure your chances of getting your home loan refinanced runs as smoothly and quickly as possible, you want to make sure you provide all the relevant documentation.

Even if you’re already a homeowner who’s gone through this process before, it’s important to double check you’ve got everything ready for when the time comes.

Here is a list of the paperwork you will likely need to show when refinancing:

  • Proof of income e.g. payslips, tax assessment notice, a letter from your employer regarding salary
  • List of existing loans and expenses e.g. credit card statements
  • Personal information e.g. drivers license, passport, birth certificate
  • List of current assets e.g. savings, shares, vehicles, high-end art, etc.
  • Repayments e.g. recent home loan repayment statements

If you’re ready to hop on the refinancing bandwagon, check out our competitive refinancing home loans or chat to one of our lending specialists today to help you start saving.

About the article

As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.

Welcome to loans.com.au _

Just in case we lose you, may I ask for your contact details....

Loading Form