Settlement is when your new lender pays out your old lender and legal ownership transfers.
Most refinance applications fall over at settlement, not at approval. The finance is approved, the valuation comes back clean, and then something as small as a missed signature or an unexpected fee holds up discharge. For clients refinancing in Alkimos, where property values have shifted quickly and many loans are coming off fixed rates, understanding what settlement involves means you can prepare properly and avoid last-minute problems.
What Happens Between Approval and Settlement
Your new lender prepares loan documents, your solicitor or settlement agent organises discharge from your old lender, and funds are transferred on settlement day. Once your refinance application is approved, your new lender will prepare formal loan documents and send them to you for signing. At the same time, your settlement agent or solicitor requests a payout figure from your existing lender. That payout figure includes your loan balance, any accrued interest, and discharge fees. Your new lender then arranges to transfer funds to your old lender on the agreed settlement date, and the mortgage on title is discharged and replaced with the new one.
In our experience with refinancing in the northern suburbs, settlement usually takes between two and four weeks after approval. If your fixed rate period is ending soon, timing matters. You want to settle before you roll onto a higher revert rate, but you also need enough time to complete all the legal and administrative steps without rushing.
Payout Figures and How They Work
A payout figure is valid for a set period, usually 30 days, and includes your loan balance plus interest and fees up to the discharge date. When your settlement agent requests a payout figure from your current lender, the amount will be higher than your loan balance. It includes interest calculated daily up to the nominated discharge date, any outstanding fees, and a discharge administration fee. If settlement is delayed and the payout figure expires, a new one must be requested with a revised interest calculation.
Consider a client refinancing a loan of $480,000 in Alkimos. The payout figure might come back as $481,200, which includes the loan balance, 15 days of accrued interest at their current rate, and a $350 discharge fee. If settlement is delayed by a week, that figure changes because interest continues to accrue. That is why settlement agents work to fixed dates and why last-minute delays can create confusion over how much is actually owed.
Who Manages Settlement and What You Need to Provide
Your settlement agent or solicitor coordinates discharge, transfer of funds, and registration of the new mortgage. You are responsible for signing documents on time and ensuring any required funds are in your account before settlement. Most brokers work with settlement agents who specialise in property finance. Their role is to liaise with both lenders, prepare discharge and mortgage documents, and make sure funds move on the right day. Your role is to respond quickly when documents arrive, check details carefully, and have any additional funds ready if required.
If you are refinancing to access equity for a deposit on an investment property, for example, the settlement agent will also arrange for the extra funds to be transferred to your nominated account after your old loan is paid out. That might happen on settlement day or shortly after, depending on how your new lender structures the drawdown.
Common Settlement Delays and How to Avoid Them
Delays are most often caused by unsigned documents, expired payout figures, or last-minute changes to your financial situation. One of the most common issues we see is documents sitting in an email inbox. Your lender will send loan documents electronically, and they need to be signed and returned within a set timeframe. If you are busy or away, settlement can be delayed by days or even weeks. Another issue is changes to your employment or credit file between approval and settlement. If you change jobs, take on new debt, or miss a repayment during that period, your lender may need to reassess your application.
For clients in Alkimos who are refinancing while also managing construction or renovations on their property, keeping your financial position stable between approval and settlement is important. Avoid applying for new credit, making large cash deposits, or changing your employment status until after settlement is complete.
What Settlement Costs to Expect
You will pay discharge fees to your old lender, settlement agent fees, and possibly government fees depending on your state and loan structure. Discharge fees typically range from $300 to $500. Settlement agent fees vary but are often between $800 and $1,200 for a standard refinance. If you are refinancing in Western Australia and your new loan amount is higher than your old one due to equity release, you may also pay mortgage registration fees. Some lenders offer refinance packages that cover or rebate certain costs, but not all. When you go through a loan health check, these costs should be factored into the comparison so you know whether the interest rate saving justifies the upfront spend.
After Settlement: What Changes and What Stays the Same
Your old loan is closed, your new loan is active, and your repayments switch to the new lender from the first scheduled payment date. Once settlement is complete, your previous lender will send a final statement showing a zero balance. Your new lender will confirm your loan is active and provide details of your first repayment, which is usually deducted within a few weeks of settlement. If you have set up an offset account or redraw facility with your new lender, those features become available immediately after settlement.
If your refinance was triggered by your fixed rate expiry, your new loan will be on whatever rate and structure you have chosen, whether that is variable, fixed, or split. Your repayment amount will reflect the new rate, and if you have moved to a lower rate, you will see the reduction from the first payment.
Refinancing is not just about approval. Settlement is where the actual change happens, and understanding what is involved means you can prepare properly, respond quickly, and avoid delays that cost you time or money. If your loan is no longer working for you or your fixed rate is about to end, call one of our team or book an appointment at a time that works for you.
Frequently Asked Questions
How long does refinance settlement take after approval?
Settlement usually takes between two and four weeks after your refinance is approved. The timeframe depends on how quickly documents are signed and returned, and how long it takes your settlement agent to coordinate discharge with your existing lender.
What is included in a payout figure?
A payout figure includes your current loan balance, interest accrued up to the discharge date, and any discharge or administration fees charged by your lender. The figure is valid for a set period, usually 30 days, and will change if settlement is delayed.
Who pays for settlement costs when refinancing?
You are responsible for settlement costs, which typically include discharge fees from your old lender and settlement agent fees. Some lenders offer refinance packages that rebate or cover certain costs, so it is worth comparing what is included when choosing a new loan.
Can I use my loan before settlement is complete?
No, your new loan is not active until settlement is complete and funds have been transferred. If you are refinancing to access equity, those funds will be available on or shortly after settlement day, depending on your lender's process.
What happens if I change jobs between approval and settlement?
Changing jobs between approval and settlement can cause delays or require reassessment by your lender. It is important to keep your financial situation stable during this period and inform your broker immediately if anything changes.
