What Happens Between Refinancing Approval and Settlement
Once your refinance application is approved, settlement typically occurs within four to six weeks. The settlement process is when your new lender pays out your existing lender and formally registers the new mortgage against your property title. You won't need to attend in person, as solicitors and conveyancers handle the legal work, but you'll need to complete specific tasks before the settlement date.
Consider a service member refinancing from a major bank to a lender offering no LMI loans for ADF members. The existing loan sits at $420,000 with $8,200 owing in redraw funds that were drawn down for home improvements. The member also has a $12,000 car loan they want to consolidate into the new mortgage. Total loan amount after refinancing will be $440,200. The new lender issues a discharge authority to the old lender, pays out the existing mortgage and car loan at settlement, and registers the new mortgage on the same day. The member's first repayment under the new loan begins the following month.
Discharge Authority and Payout Figure
Your new lender sends a discharge authority to your current lender, which triggers the payout process. The current lender then calculates a payout figure, which includes your remaining loan balance, any accrued interest up to the settlement date, discharge fees (typically $150 to $400), and break costs if you're exiting a fixed rate period early.
If you're coming off a fixed rate at the end of your term, break costs don't apply. If you're exiting mid-term, break costs can run into thousands depending on how much time remains and how far rates have moved since you locked in. Request a payout figure from your current lender at least two weeks before your planned settlement date so your broker can confirm the final loan amount with the new lender.
Property Valuation Requirements
Most refinancing lenders require a current property valuation to confirm your loan-to-value ratio. Lenders typically order a desktop valuation first, which costs nothing to you and uses recent sales data to estimate your property's value. If the desktop valuation comes back lower than expected or if your loan amount is high relative to the property value, the lender may order a physical inspection, which can add one to two weeks to your timeline.
For ADF members stationed at Amberley, Oakey, or Gallipoli Barracks who own property in areas like Ipswich, Springfield, or Brisbane's inner south, property values have shifted in recent years. A valuation that falls short of your expected equity position can limit your refinancing options or require you to adjust your loan amount.
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Preparing Your Discharge Authority Form
Your new lender will ask you to sign a discharge authority form, which gives them legal permission to request the payout and arrange settlement on your behalf. This document also authorises the new lender to register the mortgage on your property title once the old loan is paid out.
Some lenders require this form to be signed in person at a branch or witnessed by a Justice of the Peace, while others accept electronic signatures. If you're deployed or posted to a remote location in Queensland, confirm the signing requirements early so you can arrange a witness if needed.
Settlement Date Coordination
Your broker coordinates the settlement date with both lenders, your solicitor, and the state land titles office. Settlement usually occurs on a weekday between Tuesday and Thursday to allow time for funds to clear and for any issues to be resolved before the weekend.
If you're accessing equity as part of your refinance, the additional funds are typically deposited into your nominated account on settlement day or the following business day. If you're consolidating debt, your new lender pays those debts directly at settlement, so you don't need to make any final payments yourself.
Managing Repayments During the Transition
Your final repayment to your old lender is usually due a few days before settlement. Once settlement occurs, your old loan is closed and no further repayments are required. Your first repayment to the new lender typically falls due around four to five weeks after settlement, depending on the lender's repayment cycle.
If you have automatic repayments set up on your old loan, cancel them immediately after settlement to avoid failed transactions or overdrawn accounts. Similarly, set up new automatic repayments with your new lender as soon as your loan is active.
What to Do If Settlement Delays Occur
Settlement delays happen when a lender requires additional documentation, when a property valuation takes longer than expected, or when there's a backlog at the land titles office. If settlement is delayed by more than a few days, your payout figure may need to be recalculated because interest continues to accrue on your old loan.
Your broker will notify both lenders of the revised settlement date and ensure the payout figure is updated. You won't be charged twice for the same period, but the delay can push back your first repayment under the new loan and any plans you had for accessing equity.
Registering Your New Mortgage
Once your old loan is paid out, your new lender registers the mortgage with the Queensland Titles Registry. Registration is usually completed within one to three business days after settlement, though it can take longer during peak periods. You'll receive a copy of your new mortgage documents once registration is complete.
Until registration is finalised, your new lender holds a financial interest in your property but the mortgage isn't yet recorded on the title. You can start making repayments and using any new loan features like offset accounts or redraw as soon as settlement occurs, even if registration is still pending.
Confirming Offset and Redraw Access
If your new loan includes an offset account or redraw facility, confirm these features are active within a few days of settlement. Some lenders activate offset accounts automatically, while others require you to log in to online banking and link the account manually.
Funds sitting in your old offset account won't transfer automatically. You'll need to withdraw them before settlement and deposit them into your new offset account if you want them to start reducing interest immediately. For ADF members using offset accounts to manage deployment income or allowances, this step matters for cashflow.
Post-Settlement Documentation and Record Keeping
After settlement, keep copies of your final payout statement from your old lender, your new loan contract, and your mortgage registration documents. These records are useful for tax purposes if you're refinancing an investment property, and they provide a clear timeline if you need to query any fees or calculations later.
If you've accessed equity or consolidated debt as part of your refinance, your accountant may need these documents to separate deductible and non-deductible debt portions. For ADF members using equity release loans to fund investment purchases, accurate record keeping from day one makes tax time far less complicated.
If you're refinancing or planning a loan health check before your fixed rate ends, call one of our team or book an appointment at a time that works for you.
Frequently Asked Questions
How long does refinancing settlement take after approval?
Settlement typically occurs within four to six weeks after your refinance application is approved. The timeline depends on how quickly your current lender provides a payout figure, whether a property valuation is required, and the availability of settlement dates with the land titles office.
What is a discharge authority in refinancing?
A discharge authority is a legal document you sign that gives your new lender permission to request a payout figure from your current lender and arrange settlement on your behalf. It also authorises the new lender to register the new mortgage on your property title once the old loan is paid out.
Do I need to attend settlement when refinancing?
You don't need to attend settlement in person. Solicitors and conveyancers handle the legal work, and the transaction occurs electronically between lenders and the land titles office. You'll need to complete specific tasks beforehand, such as signing the discharge authority and confirming your payout figure.
When does my first repayment start after refinancing?
Your first repayment to your new lender typically falls due around four to five weeks after settlement, depending on the lender's repayment cycle. Your final repayment to your old lender is usually due a few days before settlement, and once settlement occurs, no further repayments are required to the old lender.
What happens to funds in my old offset account after refinancing?
Funds in your old offset account won't transfer automatically to your new loan. You'll need to withdraw them before settlement and deposit them into your new offset account if you want them to continue reducing interest. Some lenders activate new offset accounts automatically, while others require you to link them manually through online banking.
