What Happens During Refinancing Settlement
Refinancing settlement is the day your new lender pays out your old loan and takes security over your property. The entire process typically unfolds over three to five hours, handled by solicitors and settlement agents working through PEXA, the electronic settlement platform used across Australia. You rarely need to attend in person.
For borrowers in Darling Point, where the median house price sits around $9,300,000 and many residents are self-employed or run professional practices, refinancing often involves releasing equity or consolidating business debt. The settlement procedure determines when those funds actually land in your account and when your old lender stops charging interest.
The Discharge Authority and Settlement Timeline
Your old lender issues a discharge authority once they receive the payout figure from your new lender's solicitor. That authority gives permission to remove the old mortgage from your property title. Most lenders issue the discharge within 24 to 48 hours of receiving the payout request, though some non-bank lenders and smaller institutions can take up to five business days.
Consider a scenario where a Darling Point resident is refinancing a $2,000,000 loan to access equity for a second property. Settlement is booked for Tuesday. If the payout request doesn't reach the old lender until the Friday before, and that lender takes four days to issue discharge, settlement will push to Wednesday or Thursday. You continue paying interest on the old loan until settlement completes.
In our work with self-employed borrowers across the Eastern Suburbs, delayed discharge authorities remain the most common cause of settlement delays. Your broker should request the payout figure at least seven business days before the scheduled settlement date to give both sides enough time.
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How PEXA Coordinates the Exchange
PEXA operates as a digital workspace where your solicitor, the new lender's solicitor, and the old lender's representative log in simultaneously on settlement day. Funds move electronically, and the title change occurs in real time once all parties confirm their steps are complete.
Your solicitor will ask you to transfer any shortfall into their trust account at least one business day before settlement. A shortfall can arise from payout fees, government charges, or if you're drawing less equity than the full difference between your old and new loan. Once the new lender releases funds into the workspace, your solicitor uses those funds to pay out the old lender, cover registration fees, and disburse any remaining equity to your nominated account.
Settlement typically completes by early afternoon. If you're accessing equity to buy an investment property or fund a business expense, those funds usually hit your account within two to four hours of settlement finalising.
What Self-Employed Borrowers Need to Prepare
Self-employed borrowers refinancing in Darling Point should confirm with their broker whether the new lender requires updated financials before settlement. Some lenders, particularly if your application was lodged more than 90 days before settlement, will ask for a recent business activity statement or a letter from your accountant confirming your business remains trading.
If you operate through a family trust or company structure, your solicitor will also need to sight the trust deed or company extract again at settlement to satisfy anti-money-laundering requirements. These documents should be provided to your solicitor at least five business days before settlement to avoid last-minute requests.
Working professionals moving from a fixed rate into a variable loan should also clarify whether break costs apply. Break costs are calculated by your old lender and added to the payout figure. If your fixed rate period is ending within 60 days, many lenders waive or reduce break costs. If you're mid-term, break costs can run into thousands of dollars, particularly if you fixed during the low-rate environment of recent years and are now exiting into a higher rate cycle.
Settlement Day: What Actually Occurs
Your solicitor logs into the PEXA workspace around 9:00 or 10:00 am. The new lender's solicitor confirms funds are ready to release. Your solicitor verifies the discharge authority is uploaded by the old lender. Once all parties are online and all documents are verified, your solicitor authorises the fund transfer.
The old lender's account receives the payout. The old mortgage is removed from the title. The new mortgage is registered. Any balance, such as equity drawdown or surplus funds, is transferred to your nominated account. The entire sequence takes between 15 and 45 minutes of active transaction time, though the workspace often remains open for several hours while each party completes their internal checks.
If something is missing, such as a discharge authority or a signed direction to pay, settlement will not proceed. The workspace is rescheduled, usually to the next business day. You continue paying interest on the old loan until settlement completes.
Registration and Title Update
Title registration happens automatically through PEXA once settlement completes. The new mortgage appears on your title within minutes, and the old mortgage is marked as discharged. You can access an updated title search through your solicitor or directly through the NSW Land Registry Services website within 24 hours.
For borrowers in Darling Point who are refinancing to access equity and immediately purchasing another property, timing between the two settlements becomes critical. Your solicitor will coordinate both PEXA workspaces to ensure the equity from your refinance settlement is available in time for the purchase settlement. If the refinance settles at 2:00 pm and the purchase is scheduled for 11:00 am the same day, the purchase will need to be rescheduled or you'll need to provide bridging funds.
After Settlement: Loan Activation and Offset Setup
Your new loan activates on settlement day. Interest begins accruing on the new loan from the moment funds are drawn, not from the date you signed the loan contract. If your home loan refinancing included an offset account, that account is typically opened within 24 hours of settlement, though some lenders take up to three business days.
Transfer your salary or operating account balance into the offset as soon as it's active. Every day your funds sit in an offset account linked to a $2,000,000 loan at current variable rates saves you around $200 to $250 in interest per month per $10,000 held in offset.
If your refinance included consolidating business or investment debt, confirm with your broker which portion of the loan is deductible and ensure your accountant has a copy of the settlement statement. Mixing deductible and non-deductible debt without proper record-keeping can create issues at tax time, particularly for self-employed borrowers managing multiple income streams.
When Refinancing Involves Multiple Properties
Borrowers refinancing multiple properties or cross-collateralising loans will have multiple discharge authorities and multiple PEXA workspaces. Each property requires its own settlement process, and all must complete on the same day for the new loan structure to activate.
In our work across the Eastern Suburbs, we regularly see professionals refinancing a Darling Point home and an investment property in Bondi Junction or Paddington into a single loan facility with a lower blended rate. Both properties must settle simultaneously. If one discharge authority is delayed, both settlements are postponed.
Your solicitor will charge a separate settlement fee for each property, typically between $800 and $1,500 per title depending on complexity. Registration fees in New South Wales are also charged per title.
Common Settlement Delays and How to Avoid Them
The three most common delays are missing discharge authorities, unsigned payout directions, and last-minute lender queries about your employment or business status. Discharge delays are the lender's responsibility, but the other two are within your control.
Sign and return all settlement documents to your solicitor within 24 hours of receiving them. If your solicitor emails a payout direction or a authority to act, respond immediately. A delay of even one business day can push settlement back by a week if it falls before a public holiday or long weekend.
If you've changed jobs, sold a business, or restructured your income since your loan was approved, tell your broker immediately. Lenders can and do withdraw loan offers if your circumstances change materially between approval and settlement. Self-employed borrowers should avoid making large business purchases or taking on new debt between approval and settlement, as these can trigger a lender review.
Call one of our team or book an appointment at a time that works for you if you're refinancing in Darling Point or across the Eastern Suburbs. We'll coordinate the full settlement process with your solicitor and lender, track your discharge authority, and make sure funds land in your account on the day you expect them.
Frequently Asked Questions
How long does refinancing settlement take?
Refinancing settlement typically completes within three to five hours on the scheduled day, with most transactions finalising by early afternoon. The active transaction time within the PEXA workspace is usually 15 to 45 minutes once all parties are online and all documents are verified.
Do I need to attend refinancing settlement in person?
You rarely need to attend refinancing settlement in person. Your solicitor handles the entire process through PEXA, the electronic settlement platform. You'll only need to transfer any required funds to your solicitor's trust account before settlement and sign documents in advance.
When do I stop paying interest on my old home loan?
You stop paying interest on your old loan the day settlement completes. Interest accrues up until settlement day, so any delay in settlement means you continue paying interest on the old loan for additional days.
What happens if my old lender doesn't issue the discharge authority on time?
If your old lender doesn't issue the discharge authority on time, settlement cannot proceed and will be rescheduled, usually to the next available business day. You continue paying interest on the old loan until the discharge is provided and settlement completes.
How quickly can I access equity after refinancing settlement?
Equity funds usually hit your nominated account within two to four hours of settlement finalising. Your solicitor will transfer any balance remaining after the old loan is paid out and all fees are covered.
