How to refinance your home loan if you’re self-employed

Refinancing your home loan – that is, switching to a different loan type – can, among other things, help you reduce costs and better manage your repayments. However, for small business owners, understanding the process of changing your home loan can be time consuming.

To save you some time, here are six steps that can help you successfully refinance your home loan as a small business owner or if you're self-employed.

1. Understand why you want to refinance

Be clear on why you want to make a switch. This will help you determine whether the benefits of a new home loan outweigh the costs of your current loan.

Some common reasons for a small business owner or someone who is self-employed to switch include:

• A lower interest rate
• Consolidating your business and personal banking with one financial institution.
• Changing your home loan type – CommBank customers can do this in NetBank.

2. Compare home loans

When looking at new home loans it’s important to consider more than just the interest rate. You should also compare all the relevant features, fees and charges of the current loan against the possible new one. You can do this easily with CommBank home loans using our comparison table.

3. Estimate the costs and what you can afford

Your business income and expenses may have changed since you last applied for your existing home loan, so check what you can afford. You’ll also want to factor in all the fees you may be charged, such as exit, break, settlement and new loan establishment fees, as well as any ongoing costs.

If you’re looking for more information on costs and borrowing capacity, you can make an appointment with a CommBank lending specialist to meet in branch, at work or over the phone.

4. Organise your paperwork

Have your documents ready for your lender appointment to help you get a decision sooner. You’ll typically be asked for the most recent copies of the following documents to complete your application:

• Business financial statements
• Individual and business tax returns
• ATO notices of assessment
• Statements for the home loan you want to refinance
• Statements for savings, credit cards and other loans you hold with other financial institutions.

5. Apply

Once you’ve prepared your documents, the lender will submit an application to assess your income against your loan commitments and expenses, as well as your credit history. You can typically apply for one of the two options:

• A standard refinance process
• A FASTRefi or fast-tracked process, provided you meet certain eligibility criteria.

A CommBank home lending specialist can outline the differences between the two processes to help you decide which best suits your circumstances.

If your application is successful you’ll receive a letter of approval and contract for your new home loan.

6. Set up your new home loan

After the lender has received all the signed loan documents, your existing home loan will be paid out and a new home loan will be established. The timings and process will differ slightly according to the refinance option you choose:

Standard refinance

• Typically completed within several weeks of the lender receiving all the signed loan documents
• A settlement occurs to exchange titles to your property, and your new home loan is used to pay off your current loan.

FASTRefi

• Generally completed within days of the lender receiving all the signed loan documents
• The lender will pay out your home loan and organise to collect the title to the property – typically no settlement occurs.