Refinancing Settlement: What Happens and When

Settlement is when your new lender pays out your old lender and your refinance becomes active.

If you've decided to refinance your mortgage and you're waiting on approval, you might assume that once the paperwork is signed, the switch happens immediately. It doesn't. The settlement process takes several days, sometimes weeks, and involves coordination between your existing lender, your new lender, your conveyancer or settlement agent, and the land titles office. Knowing what happens during this period helps you avoid surprises, especially if you're counting on features like an offset account or redraw facility to become available by a certain date.

What Happens Between Approval and Settlement

Once your refinance application is formally approved, your new lender prepares loan documents and sends them to you for signing. After you've signed and returned these, the lender books a settlement date with your settlement agent or conveyancer, usually between five and ten business days out, though this can vary depending on how quickly all parties respond.

Your settlement agent coordinates with both lenders to confirm the exact payout figure from your existing lender. This figure includes your remaining loan balance, any accrued interest up to settlement day, and discharge fees. Your new lender then transfers the funds to pay out the old loan, and the discharge of mortgage is registered on the title. Until this registration occurs, your old loan remains active and you're still obligated to make payments under that loan.

In our experience working with clients around Joondalup, delays often happen when the property valuation ordered by the new lender comes back lower than expected, or when there are minor discrepancies in the title search that need clarifying before the new lender will release funds. These aren't common, but they do push settlement dates out.

How Long Does Refinancing Settlement Take in Western Australia

Typical settlement timeframes in Western Australia sit between seven and fourteen business days from when loan documents are signed, assuming no complications arise.

Consider someone refinancing a property in Joondalup who signed their loan documents on a Monday. The lender books settlement for the following Wednesday, giving ten business days. The settlement agent requests the payout figure from the old lender on Tuesday, which arrives by Thursday. The new lender confirms funds availability by the following Monday, and settlement proceeds as scheduled on Wednesday. The discharge is lodged with Landgate that afternoon and registers within two business days. From signing to full registration, the process took twelve business days.

If you're coming off a fixed rate period that's about to expire and you want to avoid rolling onto a higher variable rate with your current lender, timing your fixed rate expiry refinance matters. You'll want loan documents signed at least two weeks before your fixed period ends to allow enough buffer for settlement to complete before the rate change takes effect.

Who Coordinates Your Refinance Settlement

Your mortgage broker typically arranges the settlement agent or conveyancer, though you can also appoint your own if you prefer.

The settlement agent acts as the intermediary between your old lender, your new lender, and the land titles office. They request payout figures, receive funds from the new lender, pay out the old loan, arrange for the discharge of the old mortgage, and register the new mortgage on the title. Your broker stays in contact with the settlement agent throughout to make sure the process moves forward and to flag any issues early.

In Joondalup, where many properties are owner-occupied family homes in established suburbs around Edgewater, Hillarys, and Sorrento, we regularly see settlement agents dealing with straightforward refinances that involve a single mortgage on a standard residential title. These usually proceed without complications. If your property has a second mortgage, a caveat, or a cross-collateralised loan structure, the settlement agent needs to coordinate discharge across multiple lenders, which adds time and complexity.

What You Need to Pay at Settlement

You'll need to cover settlement agent fees, discharge fees from your old lender, and any application or establishment fees charged by your new lender that weren't capitalised into the loan amount.

Settlement agent fees typically range from around four hundred to seven hundred dollars depending on the complexity of the transaction. Discharge fees from your existing lender are usually between three hundred and five hundred dollars. Some lenders charge an establishment fee on the new loan, often between two hundred and six hundred dollars, though many lenders waive or reduce this fee during promotional periods.

If you're refinancing to access equity in your property for an investment purchase or renovation, your new loan amount will be higher than your existing loan balance. In that scenario, your new lender pays out the old loan and transfers the remaining funds to you, usually within one or two business days after settlement completes. A loan health check before you refinance can clarify how much equity you can access and whether the costs involved make the refinance worthwhile.

When Your New Loan Becomes Active

Your new loan becomes active on settlement day, which means interest starts accruing under the new loan from that date, and any features like offset accounts or redraw facilities become available once the lender activates them in their system.

Your old lender will usually stop debiting repayments from your nominated account once they receive notice that settlement is booked, but you should confirm this directly with them to avoid accidental missed payments if settlement is delayed. Your new lender will notify you of your first repayment date, typically within two to four weeks of settlement, and you'll need to set up a new direct debit or transfer arrangement.

If you've refinanced to consolidate debts into your mortgage, those debts are usually paid out by your new lender at settlement as part of the loan advance. You'll need to provide account details and payout figures for each debt to your broker and settlement agent well before settlement day so the lender can arrange payment.

What Delays Settlement

The most common delays come from missing documentation, slow responses from the existing lender, or issues identified during the final title search.

As an example, someone refinancing a property in the northern Joondalup suburbs might have their settlement delayed because their existing lender took five days longer than expected to provide the final payout figure. By the time the figure arrived, the original settlement date had passed, and a new date had to be booked. This pushed the settlement out by another week. During that extra week, interest rates shifted slightly, and the client ended up rolling onto a higher rate with their old lender for one additional repayment cycle before the refinance completed.

Another common delay happens when the title search reveals an unregistered interest or caveat that wasn't disclosed during the application. The new lender won't proceed until the caveat is removed, which can take several weeks if it involves legal proceedings. Disclosing any known interests on your property upfront during your refinancing application prevents this.

Call one of our team or book an appointment at a time that works for you. We'll walk through the settlement timeline for your specific refinance and make sure everything is coordinated properly so you can switch lenders without delays or unexpected costs.

Frequently Asked Questions