Top Tips to Refinance Your Home Loan in Perth

What Actually Happens During a Refinance

Refinancing replaces your existing home loan with a new one, usually to access a lower rate, improve loan features, or release equity. The process involves applying with a new lender, undergoing a property valuation and credit assessment, and settling the new loan while discharging the old one.

Most Perth homeowners refinance for one of three reasons: their fixed rate period has ended and they're now on a higher variable rate, they want to consolidate debt into their mortgage to improve cashflow, or they need to access equity for a deposit on an investment property. Each scenario follows the same core steps, but the timeline and complexity shift depending on your current loan structure and what you're trying to achieve.

Consider a homeowner in Joondalup who purchased five years ago and has been paying 5.8% on a variable rate for the past three years. Refinancing to a new lender offering 5.3% reduces monthly repayments and shifts around $15,000 in interest costs over the next five years back into their offset account. The process took six weeks from initial conversation to settlement, with most of that time spent waiting on the property valuation and formal loan approval.

Does Refinancing Cost Money Upfront

Most refinancing costs are either rolled into the new loan or waived by the new lender as part of their switching incentive. You'll typically face a discharge fee from your current lender, which ranges from $150 to $400, plus any break costs if you're exiting a fixed rate early. Some lenders also charge application fees, but many Perth-based lenders waive these to attract refinance business.

The property valuation is usually covered by the lender if you're borrowing under 80% of the property's value. If you're above that threshold or the lender wants a physical inspection rather than a desktop valuation, you might be asked to contribute $200 to $300. Settlement fees and legal costs are often bundled into the new loan, so you're not paying them out of pocket on settlement day.

If you're coming off a fixed rate, check your loan contract for the exact expiry date. Refinancing after that date means you avoid break costs entirely, which can run into thousands of dollars depending on how much time is left on the fixed term and how much rates have moved since you locked in.

How Long Does the Refinance Process Take

From the day you submit your application to the day you settle, expect four to eight weeks. The timeline depends on how quickly you provide documents, how busy the lender's assessment team is, and whether the valuation comes back at or above the figure you need.

The first week is document collection: payslips, tax returns, bank statements, and your current loan statement. Once the application is lodged, the lender orders a valuation, which takes one to two weeks depending on whether it's a desktop review or a physical inspection. Formal approval usually follows within a week of the valuation landing. After that, you're waiting on settlement, which the lender coordinates with your current lender and the settlement agent.

In Perth's northern suburbs, desktop valuations are common for established homes in areas like Wanneroo or Alkimos, where recent sales data is plentiful. If you're refinancing a property in a smaller coastal pocket like Scarborough or Cottesloe, the lender might request a physical inspection to confirm condition and any recent renovations that could affect value.

What Documents You'll Need to Provide

Every lender asks for proof of income, proof of identity, and details of your current loan. If you're a PAYG employee, that means your two most recent payslips and your last two years of tax returns or notices of assessment. If you're self-employed, expect to provide two years of business financials and personal tax returns.

Your current loan statement should show the outstanding balance, the interest rate you're paying, and any redraw or offset balances. The new lender uses this to calculate how much they're refinancing and whether you're accessing additional funds. If you're consolidating debt, bring statements for any personal loans or credit cards you want rolled into the mortgage.

Bank statements covering the past three months show your spending patterns and whether you're managing your current debts comfortably. Lenders look for regular savings behavior and no missed payments on existing loans. If you've recently changed jobs or taken parental leave, mention it upfront rather than waiting for the lender to spot it in your payslips.

Should You Switch Lenders or Stay Put

Switching lenders gives you access to sign-on incentives like cashback offers or waived fees, and it forces your current lender to compete if they want to keep your business. Staying with your current lender avoids the settlement process and often means a quicker turnaround, but you lose the leverage that comes with being a new customer elsewhere.

If your current lender matches the rate you've been offered elsewhere, compare the loan features as well. A lower rate on a loan without an offset account or flexible repayment options might cost you more over time than a slightly higher rate with those features included. We regularly see Perth clients who refinance for a rate that's only 0.2% lower, but the real value comes from switching to a loan with a full offset account that shields their savings from interest.

Internal refinancing, where you stay with your current lender but move to a different product, skips the valuation and settlement steps. It's faster, but the rate you're offered is often higher than what you'd get as a new customer with a competing lender. If your property has increased in value since you bought it, switching lenders also lets you access that equity without a separate top-up application.

How Property Valuation Affects Your Refinance

The lender orders a valuation to confirm your property is worth enough to support the loan amount you're requesting. If the valuation comes in lower than expected, you might need to reduce the amount you're borrowing or provide a larger cash contribution to settle any gap.

Perth's property market has seen steady value growth in suburbs like Scarborough, Mount Lawley, and South Perth, so most refinances in these areas sail through valuation without issue. If you're refinancing a unit in a high-density development or a property in a regional area outside the metro zone, the valuer might take a more conservative view, especially if recent sales data is thin.

If you've renovated since purchasing, mention it in your application. A kitchen or bathroom upgrade can add $20,000 to $50,000 to your property's value, which improves your loan-to-value ratio and might help you avoid lenders mortgage insurance if you were previously sitting just above the 80% threshold.

Fixed or Variable After You Refinance

Your choice between fixed and variable depends on whether you value certainty or flexibility. A fixed rate locks in your repayments for one to five years, which protects you if rates rise but leaves you stuck if they fall. A variable rate moves with the market, so your repayments can increase or decrease, but you keep full access to offset accounts and redraw facilities.

Many Perth homeowners split their loan, fixing a portion to manage repayment stability while keeping the rest variable to maintain flexibility. If you're refinancing to access equity for an investment property, keeping at least part of your loan variable means you can redraw or offset against the investment portion without breaking a fixed rate term.

If you're refinancing because your fixed rate has already expired, consider whether rates are likely to move up or down over the next 12 months before locking in again. Fixing at the peak of a rate cycle can cost you thousands in break fees if you need to exit early, while staying variable gives you the option to refinance again without penalty if a lower rate appears.

What Happens on Settlement Day

Settlement is when your new lender pays out your old lender, and ownership of the debt transfers. You don't need to attend in person - your settlement agent and the lenders handle everything - but you'll need to ensure any final documents are signed and returned a few days before the scheduled date.

On settlement day, your old loan is discharged, which means the debt no longer exists with that lender. Your new loan activates, and any additional funds you've accessed as part of the refinance are deposited into your nominated account. If you're keeping an offset account with your old lender, withdraw those funds before settlement or they'll be used to reduce your outstanding balance.

After settlement, set up your regular repayments with the new lender and link any offset accounts. If you've refinanced to consolidate debt, close the old credit cards or personal loans once they're paid out to avoid running up new balances. Most people see the rate reduction reflected in their first repayment, which usually falls two to four weeks after settlement.

If you're weighing up whether refinancing makes sense for your situation, a loan health check gives you a clear picture of what you're currently paying compared to what's available in the market. Call one of our team or book an appointment at a time that works for you.

Frequently Asked Questions