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How does refinancing work?

Refinancing your home can seem like a complex process – especially if securing your first home loan was particularly stressful or tricky.

In reality, it's often much more straightforward than that.

This is because once you've chosen which lender and home loan to refinance with, the bank will guide you through the process. 

Step-by-step guide to refinancing a home loan

Whether you're refinancing because you need a different product, want a better deal or you'd like to switch to another bank, follow these simple steps to successfully refinance your mortgage:

  1. Contact your mortgage lender to discuss how refinancing works
    It can be quite easy for you to refinance your home loan. Get in touch with your home loan manager who can guide you through the entire process. After discussing your unique needs, your home loan managers will help you apply.
  2. Get your document ducks in a row
    Before you submit your application, check that you have included any necessary supporting documentation. At a minimum, you'll generally need to provide documents that prove your income and validate your financial position. Your home loan manager will let you know exactly which documents you need to provide.
  3. Apply to refinance your home loan
    Submit your completed application to your home loan manager or broker.
  4. Keep an eye out for mail
    Once your application is approved, you may receive an official Letter of Offer. You need to sign and return this, with all your documentation, so that a speedy settlement can be arranged.
  5. Arrange settlement
    Once they've received all your supporting documentation and signed contract, the lender will organise settlement with your solicitors or conveyancers and confirm everything with you in writing. This step can take several days.
  6. Draw down your new home loan
    Once these steps are all wrapped up, it's time to celebrate and pay off your mortgage with your new home loan.

How long does the whole process take?

It can be as short as a few days, or it could take 6 weeks or more. Fortunately, there are steps you can take to ensure your refinancing is as efficient as possible.

See what you can do to speed up your refinancing process.

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Important information

This article is intended to provide general information of an educational nature only. This information should not be relied upon as personal financial product advice as it does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of the information to your own circumstances and seek independent legal and financial advice prior to making any investment choice. There are risks associated with any investment and this document is not intended to list all of them in respect to any particular investment opportunity. Prices, levels and indications contained in this document are illustrative only and may not represent future performance. HSBC does not warrant or represent the performance of any investment opportunity. 

 

Disclaimer: Credit provided by HSBC Bank Australia ABN 48 006 434 162. AFSL/Australia Credit Licence 232595. Home Loan Terms (PDF), Personal Banking Booklet (PDF), Fees and Charges (PDF), and lending criteria apply. This article does not take into account your personal or financial situation. Please consider a relevant Product Disclosure Statement, available at hsbc.com.au or by calling 1300 308 008 before making a decision about this product.