What is Refinancing?
A home loan is made up of 2 main documents, a home loan contract and a mortgage. The home loan contract sets out the terms and conditions of your loan while the mortgage provides the security to the lender, in case you default on your loan, this gives them the right to sell the property to get their money back if required.
Refinancing your home loan is the process of paying back your existing loan (discharging) and taking out a new loan with a different lender. This process might sound complicated but the good news is that your new lender will usually look after the paperwork required to get rid of the old lender, so they can make sure they properly secure your new loan.
To discharge your old loan you will need to give your outgoing lender a notice of discharge.
Tip!
Some ruthless banks and lenders will ignore your discharge request for as long as possible. They do this because it keeps your loan on their books for longer making them more profits.
If you encounter this be firm and don’t hesitate to report them to the Banking Ombudsman or Department of Fair Trading if required. Look out for excuses like we need the request on our standard form or claims that they never received the authority.