How to refinance without resetting your loan term
The one setting most borrowers miss when they switch lenders, and how to hold your original payoff date while still taking the better rate.
- Your current loan statement, showing the balance and remaining term
- Two recent payslips, or two years of returns if you are self-employed
- Roughly 30 minutes, and about four weeks of patience for settlement
Check your current payoff date
Find it on your most recent statement, not your original contract. If you have ever made an extra repayment or used an offset, the real date is earlier than the contract says, and that earlier date is the one you want to protect.
Get your exit and break costs in writing
Ask your current lender for a discharge figure and, if you are on a fixed rate, a break cost quote. Break costs move daily and the quote is usually only valid for a few days, so get it close to when you intend to act.
Worth knowing. A break cost on a fixed loan can run to thousands. It is not a penalty, it is the lender recovering its funding cost, and it is the single most common reason a refinance that looked good on paper does not stack up.Set the new loan to your remaining term
This is the step everyone misses. New loan applications default to 30 years. If you are 8 years into a 30 year loan, ask for a 22 year term. Same rate, same lender, thousands less interest, and your payoff date does not move.
Keep the repayment, not the minimum
If the new rate lowers your minimum repayment, set your direct debit back to the old amount. The difference goes straight to principal, and it is the easiest saving available to you at any point in the loan.
Settlement usually lands three to five weeks after your new loan is approved. Your old lender is paid out, your direct debit switches over, and we check the new term is what you asked for before you sign anything.
Any advice on this page is general in nature only and does not take into account your objectives, financial situation or needs. Before acting, consider whether it is appropriate for you and read the relevant disclosure documents. Lending and insurance products are subject to approval, eligibility, terms, conditions and fees. For complaints and further details, see our Regulatory Information page.
Reviewed by Fync’s responsible manager on .