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Development Finance

Can You Refinance a Development Loan?

Quick answer

Refinance facilities often sit around

60% 75%

Of completed value or eligible stock value

Typical exit loan term 3 to 12 months
Common refinance timing Mid build or completion
Key evidence required Valuation, QS, exit plan

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Yes, in many cases you can refinance a development loan. This may happen during construction, at practical completion, or after completion where unsold stock remains. The purpose is usually to reduce interest costs, extend time for settlements, replace a lender, or restructure the exit.

Whether refinance is possible depends on the stage of the project, remaining debt, progress of works, current valuation, and how clearly the developer can show the new lender how the facility will be repaid.

When can a development loan be refinanced?

A refinance can be possible at several points in the life of a project, not just at the end.

In practice, refinance is usually easier when there is a clear reason for the new facility and enough evidence to show the project has been de risked.

Common refinance scenarios include:

Refinancing an expensive private or non bank facility into a lower cost lender
Mid build lender takeover where construction is already underway
Exit finance at practical completion while waiting for settlements
Residual stock finance against completed but unsold dwellings or lots
Refinance to hold completed stock for rent rather than immediate sale
Restructuring a facility where the original term is expiring before the exit is complete

How Refinancing a Development Loan Works

The new lender does not simply take your word for the project position. They usually reassess the deal almost as if it were a fresh application.

That means the lender will review current debt, project status, valuation, cost to complete, remaining stock, and the revised exit strategy.

A typical refinance process may include:

01 Review of the existing loan and payout figure
→
02 New valuation and project due diligence
→
03 QS review of works completed and cost to finish
→
04 Approval of the new facility and legal documentation
→
05 Payout of the old lender and transfer of security
→
06 Ongoing drawdowns or exit period under the new loan

If the refinance is mid build, the new lender may continue staged drawdowns. If the project is complete, the new facility may operate more like exit or residual stock finance.

How Refinance Loans Are Usually Structured

Refinance structures depend on whether the project is still under construction or already complete.

Option 01

Mid build refinance

The new lender pays out the existing facility and funds the remaining cost to complete under fresh terms and ongoing progress drawdowns.

Option 02

Exit or residual stock finance

Once the project is complete, the lender may refinance the debt against completed stock to allow time for settlements, sales, or long term hold refinance.

Common refinance range 60–75%

Mid build refinance may be assessed against current debt, cost to complete, and revised facility size
Completed stock or exit finance is often sized against current value and saleability of the remaining stock

Some Australian exit and residual stock products advertise terms around 3 to 12 months and lending of up to around 75 percent LVR, although the exact structure depends on the asset, lender, and stage of the project.

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What Lenders Look At Before Approving a Refinance

A refinance is usually approved or declined based on current project risk, not the original story from when the site was first funded.

The stronger the current evidence, the easier it is to move to a new lender.

Lenders commonly want to see:

Current payout figure and statement from the existing lender
Fresh valuation on the site, completed works, or unsold stock
QS report showing works completed and cost to finish
Updated feasibility including interest, holding costs, and contingencies
Evidence of presales, sales activity, leasing strategy, or refinance exit
Builder details, contract position, and any known delays or variations
Program status, approvals, titles, and expected settlement timing
A clear primary exit and a sensible fallback exit

3 - 12 M

Many exit style refinance facilities are short term. That is why lenders focus heavily on realistic sale timeframes, documented refinance pathways, and whether the current loan can be fully cleared inside the new term.

Why Developers Refinance

Refinancing is usually about solving a timing, pricing, or structure issue rather than starting again from scratch.

Lower cost debt

A developer may refinance from a higher rate private lender into a cheaper senior or bank style facility once the project is more advanced and lower risk.

More time to exit

Exit finance can replace a construction loan at practical completion where settlements, titles, or sell down take longer than the original facility allows.

Hold or recycle capital

Residual stock refinance can help a developer retain some dwellings, unlock equity, or avoid discounting completed stock too quickly in a slower market.

Common refinance problems

Refinance usually fails when the new lender sees unresolved risk, unclear exit timing, or too little evidence to justify taking over the project.

Cost to complete is too tight

If the QS report shows the remaining budget is thin or contingencies are inadequate, the new lender may decline the refinance.

Possible solutions include:

Injecting extra equity
Revising the cost plan and contingencies
Using a lender that is comfortable with more complex situations

Exit strategy is weak

Lenders want a defined repayment path. If sales are uncertain or the retain strategy is not yet financeable, the refinance becomes harder.

Helpful supporting evidence can include:

Presale status and expected settlement dates
Comparable sales evidence and agent advice
Indicative bank terms for a retain and refinance outcome

The current lender charges exit costs

Even if the new rate is lower, exit fees, new legal costs, valuation fees, and QS costs can make the refinance less attractive if the numbers do not stack up.

Before switching, the developer should compare the full cost of moving, not just the headline rate.

Project issues have emerged

Delays, disputes, expired approvals, weak presales, or a falling valuation can all make the new lender cautious.

Solutions may include:

Updating approvals and documentation
Restructuring the exit strategy
Using short term specialist exit finance before moving to a longer term lender

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Steps To Refinance a Development Loan

Step

01

Confirm why the current loan needs to be refinanced and obtain the payout position from the existing lender

Step

02

Prepare updated valuation, QS report, feasibility, approvals, and project status information

Step

03

Present the deal to lenders that match the project stage, whether mid build, exit, or residual stock

Step

04

Compare rates, fees, term, drawdown structure, and any new conditions or required equity

Step

05

Accept terms and complete valuation, legal, and due diligence requirements for the new facility

Step

06

The new lender settles, pays out the old facility, and the project continues under the revised loan structure

Speak with a Development Finance Specialist

Property development finance can vary significantly depending on the project size, location, approvals, and the developer's experience.

A specialist can review your project and help determine which lenders may be able to fund it.

Speak with a finance specialist about refinancing your development loan.

Submit the short form below and a development finance specialist will review the current facility, project stage, and possible refinance options.

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Development Finance

Can You Refinance a Development Loan?

Quick answer

Refinance facilities often sit around

60% 75%

When can a development loan be refinanced?

How Refinancing a Development Loan Works

How Refinance Loans Are Usually Structured

Option 01

Mid build refinance

Option 02

Exit or residual stock finance

Need Help with your Project?

What Lenders Look At Before Approving a Refinance

Why Developers Refinance

Lower cost debt

More time to exit

Hold or recycle capital

Common refinance problems

Cost to complete is too tight

Possible solutions include:

Exit strategy is weak

Helpful supporting evidence can include:

The current lender charges exit costs

Before switching, the developer should compare the full cost of moving, not just the headline rate.

Project issues have emerged

Solutions may include:

Steps To Refinance a Development Loan

Step

01

Step

02

Step

03

Step

04

Step

05

Step

06

Speak with a Development Finance Specialist

Speak with a finance specialist about refinancing your development loan.

Contact Form

Prefer to speak with someone directly ?

1300 421 044

Related Questions

01Why would a developer refinance mid build?

02What is development exit finance?

03How long do exit finance loans usually run for?

04Can you refinance unsold stock after completion?

05What do lenders look for before approving a refinance?

Helpful Property Finance Guide

Guide to development refinance

Understanding exit finance

Residual stock finance explained

How mid build refinance works

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