Refinancing settlement is the day your new lender pays out your old loan and your new mortgage officially starts.
Most of the work happens behind the scenes between your broker, the lenders, and your solicitor. You don't need to take time off work or show up anywhere. Settlement usually takes around six to eight weeks from application to completion, though it can move faster if your valuation and paperwork come through quickly. The actual settlement day is when funds move between lenders, your old loan closes, and your new loan account opens. If you're refinancing in Petersham, the process is the same whether you're in a terrace near the station or a unit closer to Lewisham.
What Happens Before Settlement Day
Your new lender needs a few things lined up before they can settle. They'll order a property valuation to confirm what your home is worth. For Petersham properties, valuers usually turn these around within a week or two, though it can stretch longer during busy periods. The lender will also run a final credit check and verify your income again, so if anything has changed since you applied, let your broker know early.
Once the lender approves everything, they'll issue what's called a settlement date. This is the day they've agreed to pay out your old lender. Your solicitor or conveyancer handles most of the coordination from here. They'll request a payout figure from your old lender, which includes your remaining loan balance plus any fees or interest up to settlement day. If you're coming off a fixed rate, this is where break costs would show up in the payout figure. You can read more about fixed rate expiry timing if that applies to you.
Your solicitor will also prepare the discharge of mortgage documents. These are the legal forms that remove your old lender's interest in your property and register your new lender instead. You'll need to sign these, usually a week or so before settlement. Most solicitors can arrange for you to sign electronically or drop by their office.
Documents You'll Need to Provide
Your broker will walk you through what's needed, but expect to provide proof of income again, recent bank statements, and details of any debts you've paid down or taken on since applying. If you're accessing equity as part of the refinance, the lender will want to see what you're using those funds for, especially if it's for an investment property deposit or renovations.
One thing that catches people out is discharge fees from the old lender. These usually sit between $300 and $500, and they come out of your old loan balance at settlement. Your new lender might also charge a settlement fee, though some brokers can negotiate this away depending on the lender and loan size.
What Happens on Settlement Day
On settlement day itself, your solicitor will receive the funds from your new lender and transfer them to your old lender to close out that loan. If you're pulling equity out, the leftover amount gets sent to your bank account, usually on the same day or the next business day. If you're consolidating debts into your mortgage, those payments go out at settlement too.
Your old loan account closes. Your new loan account opens. You'll get an email or letter from your new lender with your account details, how to set up your offset account if you have one, and when your first repayment is due. Repayments usually start within a month of settlement.
If something goes wrong on settlement day, it's almost always because paperwork wasn't signed in time or funds didn't clear. This is rare, but it can push settlement back by a day or two. Your broker and solicitor will stay on top of it.
Why People in Petersham Refinance
Lower interest rates are the main reason. If you've been on the same variable rate for a few years, or your fixed rate period is ending, a loan health check will show you what's available now. Rate differences of even 0.5% can save you thousands over the life of the loan.
Accessing equity is another common reason. Petersham property values have climbed steadily, and if you bought more than a few years ago, you've likely built up usable equity. Some people refinance to pull that out for a deposit on an investment property. Others use it for renovations or to consolidate higher-interest debts like car loans or credit cards.
Consider someone who bought a two-bedroom terrace in Petersham a few years back. Their fixed rate is ending, and they're about to roll onto a higher variable rate with their current lender. At the same time, they want to access some equity to renovate the kitchen and bathroom. Refinancing lets them lock in a lower rate, pull out the equity they need, and potentially move to a lender with an offset account or redraw that their old loan didn't offer. The refinance application takes a few weeks, the valuation confirms the property value has increased, and settlement happens without them needing to do much beyond signing documents. They end up with lower monthly repayments, cash in hand for the renovation, and a loan structure that suits them now.
How Long Refinancing Settlement Takes
From the day you apply to the day your new loan settles, expect around six to eight weeks. Some lenders move faster, especially if you're refinancing with minimal complications. If you're accessing equity or consolidating debts, it can take a bit longer because there's more for the lender to assess.
Valuation delays are the main thing that slows it down. If the valuer is busy or there aren't many comparable sales in your area, it can add a week or two. Your broker will chase this if it's dragging.
Once the lender approves your loan and sets a settlement date, you're usually looking at one to two weeks until settlement day. Your solicitor will coordinate with both lenders to make sure everything lines up.
Costs Involved in Refinancing Settlement
Discharge fees from your old lender are a given. Application or settlement fees from your new lender might apply, though many lenders waive these to win your business. Solicitor or conveyancer fees usually run between $800 and $1,500 depending on how complex your refinance is. If you're accessing equity or dealing with multiple properties, expect the higher end of that range.
Valuation fees are sometimes charged upfront, sometimes rolled into the loan. If your new lender covers the valuation cost, it's usually reflected in a slightly higher rate or a condition that you stay with them for a minimum period. Ask your broker to clarify this when comparing options.
If you're coming off a fixed rate early, break costs can be significant. These depend on how much time is left on your fixed term and how much rates have moved since you locked in. Your old lender will calculate this and include it in your payout figure. If the break cost is high, it might outweigh the benefit of refinancing, so run the numbers with your broker before committing.
When Settlement Gets Delayed
Delays happen, usually because someone missed a deadline. If you don't sign the discharge paperwork in time, settlement can't proceed. If your old lender doesn't send the payout figure to your solicitor promptly, that can hold things up too.
Occasionally a lender will request additional information at the last minute, especially if something in your financials has changed. This is why it's important not to change jobs, take on new debt, or make large cash deposits between applying for your refinance and settlement day. Lenders check again before they release funds, and anything unexpected can trigger more questions.
If settlement does get pushed back, your solicitor will arrange a new date with both lenders. It's annoying, but it's usually only a few days' delay.
What You'll Notice After Settlement
Your old loan disappears from your online banking. Your new loan appears, usually within a day or two. You'll need to set up your repayment method, link your offset account if you have one, and update any direct debits that were coming out for your old loan.
If you've refinanced to access equity, those funds will hit your account around settlement day. If you're consolidating debts, those accounts will close and you'll see the balances paid off.
Your repayment amount will likely change. If you've refinanced to a lower rate, your monthly repayment drops. If you've pulled out equity or extended your loan term, it might go up. Check your loan documents so you know what to expect.
Call one of our team or book an appointment at a time that works for you. We'll run through your current loan, show you what's available, and handle the refinance process from application through to settlement. You don't need to chase lenders or coordinate paperwork. That's what we're here for.
Frequently Asked Questions
How long does refinancing settlement take in Petersham?
From application to settlement, expect around six to eight weeks. The actual settlement day is when your new lender pays out your old loan, which happens in the background. Valuation delays or complex applications can add a week or two.
Do I need to attend settlement when refinancing?
No, you don't need to attend or take time off work. Your solicitor and broker handle everything between the lenders. You'll sign discharge documents beforehand, usually a week or so before settlement, but the actual settlement day happens without you.
What costs are involved in refinancing settlement?
Discharge fees from your old lender are typically $300 to $500. Solicitor fees run between $800 and $1,500. Some new lenders charge application or settlement fees, though many waive these. If you're coming off a fixed rate early, break costs may apply.
What happens on refinancing settlement day?
Your solicitor receives funds from your new lender and pays out your old loan. Your old loan closes, your new loan opens, and any equity you're accessing gets sent to your bank account. You'll receive your new loan details within a day or two.
Can refinancing settlement be delayed?
Yes, usually because paperwork wasn't signed in time or your old lender didn't provide the payout figure promptly. Changes to your financial situation between application and settlement can also trigger delays. Your solicitor will arrange a new settlement date if this happens.
