Key timelines for refinancing your home loan in Australia

Understanding the Refinancing Timeline

When you're considering refinancing your home loan, one of the most common questions is: "How long will this take?" For Australian Defence Force members, understanding the refinancing timeline is crucial, especially when you're dealing with postings, deployments, or other military commitments that might affect your availability during the application process.

The typical refinancing timeline ranges from 4 to 8 weeks from start to finish, though this can vary depending on your financial situation, the complexity of your application, and how quickly you can provide required documentation like bank statements and proof of income.

Pre-Application Phase (1-2 weeks)

Before you formally apply to refinance, there's important groundwork to complete. This phase involves conducting a home loan health check to assess your current loan's performance and identify opportunities for improvement.

During this time, you'll want to:

• Review your current interest rate and loan terms
• Research loan options from banks and lenders across Australia
• Determine your goals - whether that's accessing a lower interest rate, releasing equity in your property, or consolidating debts
• Gather initial documentation
• Consider whether you want a variable interest rate or fixed interest rate for your new loan

For ADF members, this is also an excellent time to check eligibility for special lender policies that recognise your unique employment circumstances and may offer additional benefits.

Formal Application Submission (Week 1-2)

Once you've chosen your preferred lender and loan product, the formal application process begins. This stage typically takes 1-2 weeks to complete thoroughly.

Your mortgage broker will help you complete the application and compile all necessary documentation. The streamlined application process available to many ADF members can help reduce some of the paperwork burden, but you'll still need to provide:

• Recent bank statements (usually 3-6 months)
• Payslips and employment verification
• Tax returns and assessment notices
• Details of all debts and assets
• Property valuation documents

Lender Assessment and Processing (Week 3-5)

After submission, your application enters the lender's assessment phase. This is typically the longest part of the refinancing timeline, taking 2-3 weeks on average.

During this period, the lender will:

• Verify your financial situation and employment
• Conduct a property valuation
• Assess your ability to service the new loan amount
• Review your credit history
• Calculate refinance interest rates based on your profile

For ADF members looking to release equity to buy the next property or consolidate debts, this assessment phase may take slightly longer as lenders evaluate the additional complexity.

Approval and Documentation (Week 5-6)

Once your application receives conditional approval, you'll receive a loan offer outlining the terms, including whether you've secured a fixed rate period ending at your chosen timeframe, or opted for ongoing variable rates.

This stage involves:

• Reviewing loan terms and conditions
• Arranging settlement with your current lender
• Coordinating with solicitors or conveyancers
• Finalising insurance arrangements
• Confirming the final loan amount and repayment structure

Settlement Process (Week 6-8)

The final phase is settlement, where your new loan formally replaces your existing mortgage. This typically occurs 1-2 weeks after receiving final approval.

Your new lender will pay out your existing loan, and you'll begin making repayments under your new loan terms. If you've chosen to change your loan term or structured the refinance to reduce loan repayments, these changes take effect immediately.

Factors That Can Affect Your Timeline

Several factors can influence how long your refinancing takes:

Documentation delays: Incomplete or delayed paperwork is the most common cause of timeline extensions. Having your bank statements and financial documents organised from the start helps prevent delays.

Property valuation issues: If the lender's valuation comes in lower than expected, additional negotiations may be required, potentially extending the timeline by 1-2 weeks.

Complex financial situations: Self-employed ADF members or those with multiple income sources may experience longer assessment periods.

Lender workload: During busy periods, some lenders may take longer to process applications, though working with an experienced mortgage broker can help you access loan options from banks and lenders across Australia to find those with shorter processing times.

Planning Around Military Commitments

As an ADF member, your military commitments can impact the refinancing timeline. If you're facing deployment or posting during the refinancing process, discuss this with your mortgage broker early. Many lenders understand military requirements and can accommodate service commitments, though some documentation may need to be completed before you're unavailable.

Refinancing doesn't have to disrupt your service commitments when properly planned and managed with experienced professionals who understand the unique aspects of military life.

Whether you're looking to access potentially better interest rates, consolidate debts, or release equity for your next property purchase, understanding these timelines helps you plan accordingly and set realistic expectations for your refinancing journey.

Call one of our team or book an appointment at a time that works for you to discuss your refinancing timeline and explore the loan options available to you as an ADF member.