How refinancing works, step by step

Establish what you want from the refinance: a lower rate, a different structure, cash out, consolidation, or leaving a lender. Check your current loan for fixed rate break costs, discharge fees and any cashback clawback. Get a desktop valuation so you know the LVR. Then compare lenders on rate, fees, features and policy fit for your situation, which is where a specialist earns their keep because the cheapest advertised rate is not always available to your file.

The application goes in with identification, income documents, statements for the current loan and any other debts, and the property details. The lender runs a credit check, orders the valuation, and assesses serviceability at the buffered rate. Conditional approval can come within days; formal approval follows the valuation and any conditions being met. You then sign the loan contract and mortgage, often electronically or with a witness depending on the state and lender.

You sign a discharge authority which is sent to your current lender, who has a service standard of up to 30 days to process it, and in practice takes one to three weeks. The new lender's solicitor and the old lender book settlement in PEXA, the electronic settlement platform. On the day, the new lender pays the payout figure to the old lender, the old mortgage is discharged and the new one registered, and any cash out is paid to you. Your old lender closes the loan and any offset or redraw balances are returned.

Set up repayments and offset with the new lender, update direct debits, and confirm the old loan is closed and any linked accounts are cleared. Check the first statement. If you consolidated debts, confirm the creditors are paid and the accounts closed. Diarise any fixed rate expiry or interest only end date on the new loan.