Smart ways to approach your refinance timeline

Most borrowers assume refinancing happens quickly once they decide to move. It doesn't.

The timeline stretches from a few weeks to a couple of months depending on how your lender values your property, whether your income documentation is current, and how quickly the new lender processes applications. If you're coming off a fixed rate and want to avoid rolling onto a higher variable rate, understanding the timeline means you can start early enough to make the switch work in your favour.

How long does a typical refinance take?

A standard refinance process takes between two and six weeks from application to settlement. The new lender needs to assess your loan, value your property, prepare loan documents, and arrange settlement with your current lender. If your application is straightforward and you've provided complete documentation upfront, you're looking at the shorter end of that range. If the lender requests additional information, orders a physical property valuation, or if settlement availability is limited, the timeline extends.

Consider a borrower refinancing a standard owner-occupied loan with stable employment and a property in a metropolitan area. If they submit payslips, tax returns, and bank statements at the point of application, and the lender accepts an automated valuation, the process can be done in three weeks. If the same borrower is self-employed or the property is rural and requires a physical inspection, you're adding another two to three weeks.

What slows down the refinance process?

Property valuations are the most common delay. Lenders order valuations to confirm your property supports the loan amount you're requesting. In metro areas, automated valuations are often accepted and take a day or two. In regional areas or for unique properties, a physical inspection is required, and that can add one to three weeks depending on valuer availability. If the valuation comes in lower than expected, you may need to adjust your loan amount or provide additional funds, which adds more time.

Income verification is the other major factor. If you're a PAYG employee with straightforward payslips, verification is quick. Self-employed borrowers need to provide tax returns, sometimes spanning two years, and lenders may request additional accountant letters or financial statements. If your accountant is slow to respond or your tax returns aren't lodged, the process stalls.

Changes to your circumstances between starting the refinance and settling can also delay things. If you change jobs, take parental leave, or increase your credit card limit, the lender reassesses your application. In some cases, they'll ask for updated documents. In others, they'll decline the application and you'll need to start again.

When should you start the refinance process?

If your fixed rate period is ending and you want to refinance before rolling onto a variable rate, start the process at least six to eight weeks before your fixed term expires. This gives you enough time to compare options, submit your application, and settle before the fixed rate ends. Lenders won't usually let you lock in a new rate more than 90 days in advance, so starting too early doesn't help, but leaving it until the last couple of weeks creates unnecessary pressure.

For borrowers who aren't tied to a specific date, the timeline is less critical, but starting a refinance during a period when your finances are stable makes the process smoother. If you're about to lodge a tax return, change jobs, or take extended leave, wait until your situation settles before applying.

What happens during the refinance application?

Once you submit your application, the new lender assesses your income, expenses, and credit history to confirm you can service the loan. They'll request payslips, bank statements, and details of your existing debts. If you're releasing equity or consolidating other debts into the mortgage, they'll assess the total loan amount against your income and the property value.

The lender then orders a valuation. If the valuation is acceptable and your income checks out, they issue formal approval and prepare loan documents. You'll review and sign these documents, and the lender arranges a settlement date with your current lender. On settlement day, the new lender pays out your existing loan, and you start making repayments under the new loan terms.

In our experience, borrowers who treat the application like a loan health check and gather all their documents before starting save the most time. Lenders process complete applications faster than those submitted in pieces.

Can you speed up the refinance timeline?

You can't control how long a lender takes to process your application, but you can control how prepared you are when you submit it. Have your last two payslips, recent bank statements, details of your current loan, and your most recent rates notice ready before you start. If you're self-employed, have your last two tax returns and any financial statements your accountant has prepared.

If you're refinancing to access equity, know how much you need and what you'll use it for. Lenders assess equity release more closely than a standard rate switch, so being clear about your purpose upfront avoids follow-up questions that slow things down.

Choosing a lender that accepts automated valuations in your area also cuts time. A broker can tell you which lenders are more likely to use automated valuations for your property type and location, which removes one of the longest delays from the process.

What if your current lender offers you a retention rate?

Some lenders contact borrowers before their fixed rate expires and offer a retention rate to keep them from refinancing. These offers usually come through four to six weeks before the fixed term ends. If you've already started a refinance application with another lender, you'll need to compare the retention rate against what the new lender is offering, including fees, features, and loan terms.

Retention rates can be lower than the standard variable rate your loan would roll onto, but they're not always lower than what you can access by refinancing. If the retention rate is comparable and your current loan already has the features you need, staying put saves you the time and cost of refinancing. If the retention rate is still higher than what's available elsewhere, or if your current loan lacks an offset account or redraw facility you want, continuing with the refinance makes sense.

The timing complicates things because you'll often receive a retention offer while your new application is already in progress. If you decide to accept the retention rate, let your broker know immediately so they can withdraw the application before settlement is booked.

What happens on settlement day?

Settlement is when your new lender pays out your existing loan and your refinance becomes active. You don't need to attend settlement in person. Your new lender and your current lender arrange the payout and transfer of funds through their legal representatives. Once settlement is complete, your old loan account closes, and your new loan account opens.

If you have an offset account or redraw facility with your current lender, make sure you move those funds before settlement. Once the loan is paid out, access to those accounts is typically cut off within a day or two. If you're consolidating other debts as part of the refinance, those debts are paid out at settlement as well, and you'll receive confirmation from each creditor that the debt is closed.

Your first repayment under the new loan usually comes out around 30 days after settlement, depending on the loan terms. Check with your broker or lender to confirm the exact date so you can make sure your account has enough funds.

Refinancing takes longer than most people expect, but starting early and submitting a complete application keeps the process on schedule. If you're not sure whether now is the right time to refinance or you want to know what your timeline might look like based on your situation, call one of our team or book an appointment at a time that works for you.

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