Refinance / Restructuring
Refinancing Approval Process
5 min read- Finance Guide
- Updated 2026
Quick answer
Refinancing replaces your
Application To Settlement
With multiple assessment and settlement stages
- Credit assessment Current policy applies
- Property valuation Often required
- Settlement step Old loan is paid out
1300 421 044
1300 421 044
Detailed explanation
Refinance approval is usually a staged process rather than a single decision point. A lender may first review the application at a high level, then move into document verification, servicing checks, credit review, valuation and final approval before loan documents are issued and the old loan is discharged. Each stage matters because a refinance only completes once the new lender is ready to settle and the existing lender is ready to release the current mortgage.
Core parts of the approval process
A refinance approval usually involves:
-
Initial application and supporting documents
-
Credit and servicing assessment
-
Current loan review and repayment history checks
-
A property valuation in many cases
-
Conditional or formal approval and loan documents
-
Discharge of the old loan and settlement of the new loan
Major lenders and Moneysmart guidance reflect that refinancing normally requires a new application, a review of the borrower’s current position and coordination between the incoming and outgoing lenders before settlement can occur.
What lenders usually assess before approval
Before a refinance is approved, lenders commonly focus on:
Income and employment evidence- Living expenses and liabilities
- Existing loan conduct and repayment history
- Security property value and suitability
- Loan purpose including any cash out
- Current policy fit and document completeness
- Identity and ownership verification
Approval is stronger when the file is complete, the property value supports the requested loan, and the borrower satisfies current serviceability policy rather than relying on the fact the existing loan has been paid on time.
Why the approval process can take time
Even when the refinance scenario looks simple, timing can extend because the lender may still need to verify income, order a valuation, review liabilities, confirm payout figures, issue documents and coordinate settlement with the existing lender. Approval is therefore linked to both credit assessment and administration.
APRA serviceability buffer — 3 percentage points Refinance applications are generally assessed above the actual interest rate, which means a borrower can be up to date on their current loan and still need to pass a higher test rate to qualify with the new lender.
Typical approval stages
The refinance approval process often follows these practical stages before settlement can occur
Common costs include:
Application lodged with supporting documents- Credit and servicing review by the lender
- Property valuation where required
- Conditional or formal approval issued
- Loan documents signed and returned
Lender process note
Major lender guidance shows the process often includes a valuation, final checks, loan contract acceptance, discharge of the old loan and settlement. Westpac also notes that settlement can take a few weeks for the old lender to complete in some refinance scenarios.
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Common approval problems
Refinance approvals often slow down because of policy, valuation or document issues rather than because the borrower wants to switch lenders. These are some of the most common approval bottlenecks.
Valuation comes in lower than expected
A lower valuation can reduce usable equity, lower the maximum new loan amount or force the borrower to contribute funds to complete the refinance.
Possible solutions include:
- Reduce the requested loan amount or cash out
- Consider a lower target LVR
- Provide additional security if appropriate
- Use a lender whose policy better suits the property type
A refinance is often valuation sensitive because the new lender relies on current value rather than the old lender’s balance or historical approval.
Documents or verification are incomplete
Missing payslips, tax returns, statements, payout figures or ownership details can delay assessment or prevent formal approval from being issued.
Possible solutions include:
- Provide a full document pack from the outset
- Respond quickly to follow up requests
- Make sure the current loan account details are accurate
- Check names, ownership and liabilities match across documents
Incomplete verification is one of the easiest ways for a refinance process to stall even where the deal itself is otherwise sound.
Old lender discharge or settlement timing drifts
The refinance can be approved by the new lender but still take longer to complete if payout figures, discharge documents or settlement coordination with the existing lender are delayed.
Possible solutions include:
- Return signed loan documents promptly
- Submit discharge authority information correctly
- Allow time for settlement booking between lenders
- Keep all parties aligned on the intended settlement date
Even after approval, refinance timing can still depend on how efficiently the outgoing lender completes its release process.
Steps to get Finance
Step
01
Gather identity, income, liability and current loan documents.
Step
02
Submit the refinance application and supporting information.
Step
03
Complete servicing, credit and repayment history assessment.
Step
04
Allow for a property valuation and any lender conditions.
Step
05
Sign the new loan documents and satisfy remaining requirements.
Step
06
Settle the new loan, discharge the old one and begin the new repayments.
Speak with a property refinance specialist.
Refinance approval depends on more than pricing alone.
The process can involve serviceability testing, property valuation, loan payout coordination and document checks. A detailed review can show which stage is most likely to affect timing, what documents are still needed and whether the file is likely to move smoothly to settlement.
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