The easiest way to get refinancing approved

The refinance approval process follows the same credit assessment steps as your original home loan application, but lenders now verify your current situation against the property you already own.

Most ADF members refinancing in Victoria assume the process will be quicker because they already have a mortgage. That assumption can create problems. Lenders assess refinancing applications with the same scrutiny as new purchase loans, which means they verify your income, expenses, and serviceability from scratch. Your existing loan history matters, but it does not replace a full assessment.

What Lenders Check During a Refinance Application

Lenders verify four things: your current income, your declared expenses, your credit file, and the property's current value. For ADF members, income verification works the same whether you are posted in Puckapunyal or working in Melbourne. Your payslips and group certificate confirm your base salary, and allowances like service or locality allowances are included if they appear consistently. If you have changed rank or moved to a different role since your original loan, lenders reassess your income from the new position.

Expenses get checked through your last three months of bank statements. Lenders look at what you actually spend, not what you estimate. If you are making repayments on a car loan or personal loan, those appear in your statements and reduce your borrowing capacity. Some ADF members refinance to consolidate those debts into the mortgage, which can improve cashflow if the total repayment drops.

The property valuation is the part that often surprises people. Lenders order a desktop valuation or a full inspection to confirm what your property is worth now. If values have increased since you bought, you may have more equity available. If values have stayed flat or dropped, your loan-to-value ratio might not support the loan amount you are requesting.

How Long the Approval Process Takes

From application to formal approval, most refinance applications take between two and four weeks. That timeframe depends on how quickly you provide documents, how busy the lender is, and whether the valuation comes back without issues. If you are coming off a fixed rate period and need to refinance before the expiry date, start the process at least six weeks out. Lenders can issue conditional approval earlier, but they cannot settle until the fixed rate period ends.

Conditional approval means the lender has assessed your application and agreed to the loan, subject to final checks like the valuation and verification of employment. Formal approval happens once all conditions are met. Some lenders allow you to lock in a rate once you reach conditional approval, which can be useful if you expect rates to move before settlement.

In our experience, ADF members posted to regional Victoria sometimes face longer valuation turnaround times because fewer valuers operate in those areas. If you are refinancing a property in a smaller town, allow extra time for that step.

What Happens If Your Fixed Rate Has Already Expired

If your fixed rate period has already ended and you have rolled onto the lender's variable rate, you can refinance at any time without break costs. Many ADF members delay refinancing because they assume the process is complicated or because they are waiting for rates to drop further. The longer you stay on a revert rate, the more you pay. Revert rates are typically higher than the lender's advertised variable rates for new customers, which means you are paying more each month until you refinance or negotiate a lower rate with your current lender.

Consider an ADF member in Melbourne who finished a three-year fixed term six months ago and rolled onto a revert rate that was 0.80% higher than the current variable rates offered by other lenders. On a loan amount of $500,000, that difference costs roughly $330 extra each month. Over six months, that is close to $2,000 in additional interest. Refinancing to a lower variable rate would have stopped that cost immediately. If you are unsure where your current rate sits compared to what is available now, a loan health check will show you the gap.

Supporting Your Application with the Right Documents

Lenders ask for the same core documents across most refinance applications: recent payslips, your last group certificate, bank statements for the past three months, and a current loan statement from your existing lender. If you have investment properties or other debts, they will ask for statements showing those liabilities as well.

For ADF members, the group certificate issued by Defence is usually sufficient to verify your service. If you receive allowances that are not part of your base salary, make sure those appear on your payslips consistently. Lenders treat irregular allowances differently from ongoing entitlements, and that can affect how much they include in your income calculation.

If you are refinancing to access equity for an investment property or renovation, lenders will ask what you plan to use the funds for. They may require quotes or a scope of works if you are drawing a significant amount. That step does not delay the process if you have the documents ready, but it can add time if the lender needs to clarify how the funds will be used.

When Lenders Decline or Request More Information

Not every refinance application gets approved on the first pass. Lenders decline applications or request additional information when your serviceability does not meet their criteria, when the valuation comes in lower than expected, or when something in your credit file raises a question. If you have missed repayments in the past 12 months, lenders will ask for an explanation. If your expenses are higher than average or your income has dropped since your last loan, they may ask for more detail.

Some lenders are more conservative with certain property types or locations. If you own a unit in a high-density area or a property in a regional town with limited sales data, the valuation process can take longer or result in a lower assessed value. That does not mean you cannot refinance, but it might mean you need to adjust your loan amount or provide additional equity.

If one lender declines your application, it does not mean all lenders will. Different lenders have different serviceability calculators, different approaches to ADF income, and different appetites for specific property types. Working with a broker who understands how lenders assess ADF income means you apply to the lender most likely to approve your scenario on the first attempt.

Switching Loan Features During Refinancing

Refinancing gives you the chance to change loan features that no longer suit your situation. If your current loan does not have an offset account and you have built up savings, refinancing to a loan with offset can reduce the interest you pay without changing your repayment amount. If you are paying for features you do not use, refinancing to a lower-rate loan without those extras can cut your costs.

Some ADF members refinance to split their loan between fixed and variable portions. That structure gives you certainty on part of your repayment while keeping the flexibility to make extra repayments on the variable portion. If you are planning to move again in the next few years, a variable loan without fixed-rate lock-in gives you the option to sell or refinance without break costs.

Make sure the features you are adding actually match how you manage your mortgage. Offset accounts only save you money if you keep a balance in them. Redraw facilities only help if you are making extra repayments. If you are not using those features, you are paying for functionality that does not benefit you.

Refinancing is not a one-time decision. Your loan should match your current circumstances, and those circumstances change with postings, promotions, family changes, and financial goals. If your current loan no longer fits, the approval process is the same whether you are refinancing now or waiting another year. The question is whether waiting costs you more than acting.

Call one of our team or book an appointment at a time that works for you. We will review your current loan, confirm what you are eligible for, and manage the application process from start to settlement.

Frequently Asked Questions