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Home loan refinancing: The key steps, costs and documents

Refinancing your home loan can be daunting, but we're here to simplify it for you. Let's break down the details, costs and sort out the documents you'll need.

Refinancing you home loan can be a daunting task, but we’re here to simplify it for you.  If you haven’t already, check out our top things to consider when refinancing, and what to do if your fixed rate is expiring.  Once you’re comfortable with your next steps, let’s break down what we look for, the costs, and sort out the documents you’ll need.

Step 1: Employment and income

We want to make sure you’re financially stable.  If you’ve been working a regular job for six months or been self employed for two years, you’re on the right track.  We’re pretty flexible though – your salary, pension, superannuation, even rental income can count.

Step 2: Living expenses

We’ll look at your bank statements from the past three months to see how you manage your money.  Having a budget can help you keep track of your spending and could improve your chances of getting a loan.

Step 3: Serviceability

This one’s a biggie.  We’re just making sure you can handle those new mortgage payments.  We do some math by taking your income after taxes, and subtracting living expenses and other money committments.  To get the loan, you should have at least $200 left over each month.

Step 4: Existing loans and credit cards

Now, your existing loans and credit cards – they matter too.  We’re looking at the history of your loans (the last 6 months) and your credit cards (the last three months).  Even if your credit card balance is zero, it can still affect how much you can borrow, so watch out for that.

Step 5: Preparing for interest rate rises

You know how interest rates have been pretty unpredictable? We want to make sure you’re ready for that. We’ll check if you can still handle your mortgage even if interest rates suddenly shoot up by another 3%.  This includes looking at other loans you might have on a variable interest rate too.

Step 6: Credit history

Your credit history is important.  We’ll check for any issues that could affect your eligibility.  A good credit score is definitely a plus.

The documents we’ll need to process your loan application

For the paperwork part, we usually ask for things like:

  • An application form
  • Your last three pay slips
  • If you’re self-employed, your tax assessments for the last two years
  • Proof of rental income (like a rental statement or lease copy)
  • Bank statements and credit card statements from the last three months
  • Loan statements from the last six months
  • Statements for your superannuation or any shares you own
  • Your ID (like your driver’s licence, passport, or birth certificate)

Just remember, the documents we need can vary, so just be prepared for if we ask for something that isn’t on this list.

What if your situation has changed?

If things have shifted since your last home loan application, try not to worry – it happens.  Just be honest with your lender about any changes.  Whether it’s a new job, different income sources, or even unexpected financial challenges, being open with us can help come up with a solution that works for you.

Ready to refinance? As your local, customer-owned bank, we want to get to know you and talk you through your options.  So swing by for a friendly chat and a cuppa, or call us for an obligation-free chat about your home loan.